Florida Senate - 2011 SB 990
By Senator Bennett
21-00492A-11 2011990__
1 A bill to be entitled
2 An act relating to motor vehicle title loans;
3 providing a directive to the Division of Statutory
4 Revision; repealing s. 537.001, F.S., relating to a
5 short title; amending s. 537.002, F.S.; preempting the
6 regulation of motor vehicle title loans to the state;
7 amending s. 537.003, F.S.; revising definitions;
8 providing that title loans are secured by a
9 nonpurchase money security interest in a motor
10 vehicle; amending s. 537.004, F.S.; prohibiting a
11 title loan lender from also providing deferred
12 presentment transactions; amending ss. 537.005,
13 537.006, and 537.007, F.S.; conforming provisions to
14 changes made by the act; amending s. 537.008, F.S.;
15 revising the information that must be in a title loan
16 agreement; specifying the maturity timeframe for a
17 title loan; requiring that a statement relating to the
18 cost of the loan be included in the title loan
19 agreement; revising provisions relating to the title
20 loan lender’s actions upon executing an agreement;
21 creating s. 537.0085, F.S.; allowing a borrower to
22 rescind a loan under certain circumstances; amending
23 s. 537.009, F.S.; revising provisions relating to
24 recordkeeping; conforming provisions to changes made
25 by the act; amending s. 537.011, F.S.; revising
26 provisions relating to title loan charges; prohibiting
27 a title loan from being extended; amending s. 537.012,
28 F.S.; revising provisions relating to the repossession
29 of a motor vehicle for loan default; requiring prior
30 notice to the borrower; prohibiting a title loan
31 lender from seeking a money judgment against a
32 borrower except in certain circumstances; amending s.
33 537.013, F.S.; revising prohibited acts; requiring a
34 lender to return a certificate of title 3 days after
35 regaining possession of it; prohibiting a lender from
36 loaning a principal amount that exceeds 50 percent of
37 the fair market value of the motor vehicle; repealing
38 s. 537.014, F.S., relating to the right to reclaim the
39 loan property; amending ss. 537.015, 537.016, and
40 537.017, F.S.; conforming provisions to changes made
41 by the act; repealing s. 537.018, F.S., relating to
42 authorization for county and municipal ordinances;
43 amending s. 494.00797, F.S.; conforming provisions to
44 changes made by the act; transferring activities
45 relating to title loans from the Department of
46 Financial Services to the Department of Agriculture
47 and Consumer Services by a type two transfer;
48 providing an effective date.
49
50 Be It Enacted by the Legislature of the State of Florida:
51
52 Section 1. The Division of Statutory Revision is requested
53 to rename chapter 537, Florida Statutes, as “MOTOR VEHICLE TITLE
54 LOANS.”
55 Section 2. Section 537.001, Florida Statutes, is repealed.
56 Section 3. Section 537.002, Florida Statutes, is amended to
57 read:
58 537.002 Preemption; legislative intent.—The regulation of
59 the business of offering motor vehicle title loans is preempted
60 to the state. It is the intent of the Legislature in the
61 creation of this chapter that all title loans to consumers in
62 this state, secured by a nonpurchase money security interest in
63 a motor vehicle, be regulated under this chapter, which shall by
64 the provisions of this act. The provisions of this act supersede
65 any other provisions of state law affecting such title loans to
66 the extent of any conflict.
67 Section 4. Section 537.003, Florida Statutes, is amended to
68 read:
69 537.003 Definitions.—As used in this chapter act, the term
70 unless the context otherwise requires:
71 (1) “Commercially reasonable” has the same meaning as used
72 in part V of chapter 679. In addition, Nonpublic sales or
73 disposal of personal property between a title loan lender and
74 any business affiliates of a title loan lender or a member of a
75 title loan lender’s family are presumed not to be made in a
76 commercially reasonable manner.
77 (2) “Commission” means the Financial Services Commission.
78 (1)(3) “Consumer” means an individual borrowing money for
79 personal, family, or household purposes.
80 (2) “Department” means the Department of Agriculture and
81 Consumer Services.
82 (3) “Division” means the Division of Consumer Services of
83 the department.
84 (4) “Office” means the Office of Financial Regulation of
85 the commission.
86 (4)(5) “Executive officer” means the president, chief
87 executive officer, chief financial officer, chief operating
88 officer, executive vice president, senior vice president,
89 secretary, and treasurer.
90 (5)(6) “Identification” means a government-issued
91 photographic identification.
92 (6)(7) “Interest” means the cost of obtaining a title loan
93 and includes any profit or advantage of any kind whatsoever
94 which that a title loan lender may charge, contract for,
95 collect, receive, or in any way obtain as a result of a title
96 loan.
97 (7)(8) “License” means a permit issued under this chapter
98 act to make or service title loans in accordance with this act
99 at a single title loan office.
100 (8)(9) “Licensee” means a person who is licensed as a title
101 loan lender under this chapter.
102 (10) “Loan property” means any motor vehicle certificate of
103 title that is deposited with a title loan lender as a security
104 for a title loan in the course of the title loan lender’s
105 business.
106 (9)(11) “Motor vehicle” means an automobile, motorcycle,
107 mobile home, truck, trailer, semitrailer, truck tractor and
108 semitrailer combination, or any other vehicle operated on the
109 public highways and streets of this state, used to transport
110 persons or property, and propelled by power other than muscular
111 power, but excluding a vehicle that which runs only upon a track
112 and a mobile home that is the primary residence of the owner.
113 (10)(12) “Title loan” or “loan” means a loan of money to a
114 consumer secured by a non-purchase-money security interest in
115 bailment of a certificate of title to a motor vehicle. The term
116 does not include a, except such loan made by a person licensed
117 under chapter 516, chapter 520, chapter 655, chapter 657,
118 chapter 658, chapter 660, chapter 663, chapter 665, or chapter
119 667 or a person who complies with s. 687.03.
120 (11)(13) “Title loan agreement” or “agreement” means a
121 written agreement in which a title loan lender agrees to make a
122 title loan to a borrower.
123 (12)(14) “Title loan lender” or “lender” means a any person
124 who engages in the business of making or servicing title loans.
125 (13)(15) “Title loan office” means the location at which,
126 or premises from which, a title loan lender regularly conducts
127 business under this chapter or any other location that is held
128 out to the public as a location at which a lender makes or
129 services title loans.
130 (16) “Titled personal property” means a motor vehicle that
131 has as evidence of ownership a state-issued certificate of title
132 except for a mobile home that is the primary residence of the
133 borrower.
134 (14)(17) “Ultimate equitable owner” means a person who,
135 directly or indirectly, owns or controls an ownership interest
136 in a corporation, a foreign corporation, an alien business
137 organization, or any other form of business organization,
138 regardless of whether such person owns or controls such
139 ownership interest through one or more persons or one or more
140 proxies, powers of attorney, nominees, corporations,
141 associations, partnerships, trusts, joint stock companies, or
142 other entities or devices, or any combination thereof.
143 Section 5. Section 537.004, Florida Statutes, is amended to
144 read:
145 537.004 License required; license fees.—
146 (1) A person may not act as a title loan lender or own or
147 operate a title loan office unless such person has an active
148 title loan lender license issued by the division office under
149 this act.
150 (a) A person may not act as a title loan lender from any
151 office where deferred presentment transactions, as defined in s.
152 560.402, are offered or made, or within 1,000 feet of another
153 office where title loans or deferred presentment transactions
154 are offered or made if that office is operated by a common
155 ultimate equitable owner.
156 (b) A title loan lender may not own or operate more than
157 one title loan office unless the lender obtains a separate title
158 loan lender license for each title loan office.
159 (2) A person applying for licensure as a title loan lender
160 shall file with the division office an application as provided
161 under s. 537.005(1) and (2), the bond required by s. 537.005(3),
162 a nonrefundable application fee of $1,200, a nonrefundable
163 investigation fee of $200, and a complete set of fingerprints
164 taken by an authorized law enforcement officer. The division
165 office shall submit such fingerprints to the Department of Law
166 Enforcement for state processing, and the Department of Law
167 Enforcement shall forward the fingerprints to the Federal Bureau
168 of Investigation for national processing.
169 (3) If the division office determines that an applicant
170 satisfies the requirements of this chapter an application should
171 be approved, the division office shall issue a license for up to
172 a period not to exceed 2 years.
173 (4) A license shall be renewed biennially by filing a
174 renewal form and a nonrefundable renewal fee of $1,200. A
175 license that is not renewed by the end of the biennial period
176 shall automatically reverts revert to inactive status. An
177 inactive license may be reactivated within 6 months after
178 becoming inactive by filing a reactivation form, payment of the
179 nonrefundable $1,200 renewal fee, and payment of a nonrefundable
180 reactivation fee of $600. A license that is not reactivated
181 within 6 months after becoming inactive may not be reactivated
182 and the applicant must apply for a new license shall
183 automatically expire. The department commission shall adopt
184 establish by rule the procedures for application, renewal, and
185 reactivation of a license and the application, shall adopt a
186 renewal, form and a reactivation forms form.
187 (5) Each license must be conspicuously displayed at the
188 title loan office. If When a licensee wishes to move a title
189 loan office to another location, the licensee shall provide
190 prior written notice to the division office.
191 (6) A license issued pursuant to this act is not
192 transferable or assignable.
193 (7) Each licensee shall designate and maintain a registered
194 agent in this state for service of process.
195 (8) If Whenever a person or a group of persons, directly or
196 indirectly or acting by or through one or more persons, proposes
197 to purchase or acquire a 50 percent or more interest in a
198 licensee, such person or group shall submit an initial license
199 application before for licensure under this act prior to such
200 purchase or acquisition.
201 (9) The department commission may adopt rules to allow for
202 electronic filing of applications, fees, and forms required by
203 this chapter act.
204 (10) All moneys collected by the division office under this
205 chapter act shall be deposited into the division’s General
206 Inspection Regulatory Trust Fund of the office.
207 Section 6. Section 537.005, Florida Statutes, is amended to
208 read:
209 537.005 License application for license.—
210 (1) A verified license application for licensure under this
211 act, in the form prescribed by department commission rule, must
212 shall:
213 (a) Contain the name and the residence and business address
214 of the applicant. If the applicant is other than a natural
215 person, the application must shall contain the name and the
216 residence and business address of each ultimate equitable owner
217 of 10 percent or more of such entity and each director, general
218 partner, and executive officer of such entity.
219 (b) State whether any individual identified in paragraph
220 (a) has, within the last 10 years, pleaded nolo contendere to,
221 or has been convicted or found guilty of, a felony, regardless
222 of whether adjudication was withheld.
223 (c) Identify the county and municipality with the street
224 and number or location where the business is to be conducted.
225 (d) Contain additional information as the department
226 commission determines by rule to be necessary to ensure
227 compliance with this chapter act.
228 (2) Notwithstanding subsection (1), the application need
229 not state the full name and address of each officer, director,
230 and shareholder if the applicant is owned directly or
231 beneficially by a person who as an issuer has a class of
232 securities registered pursuant to s. 12 of the Securities
233 Exchange Act of 1934 or, pursuant to s. 13 or s. 15(d) of such
234 act, is an issuer of securities which is required to file
235 reports with the Securities and Exchange Commission, if the
236 person files with the division office any information,
237 documents, and reports required by such act to be filed with the
238 Securities and Exchange Commission.
239 (3) An applicant for licensure shall file a bond with the
240 division office a bond, in the amount of $100,000 for each
241 license, with a surety company qualified to do business in this
242 state. However, in no event shall the aggregate amount of the
243 bond required for a single title loan lender may not exceed $1
244 million. In lieu of the bond, the applicant may establish and
245 file a certificate of deposit or an irrevocable letter of credit
246 in a financial institution, as defined in s. 655.005, in the
247 amount of the bond. The division original bond, certificate of
248 deposit, or letter of credit shall be filed with the office, and
249 the office shall be the beneficiary to that document. The bond,
250 certificate of deposit, or letter of credit shall be in favor of
251 the office for the use and benefit of any consumer who is
252 injured pursuant to a title loan transaction by the fraud,
253 misrepresentation, breach of contract, financial failure, or
254 violation of any provision of this chapter act by the title loan
255 lender. Such liability may be enforced either by proceeding in
256 an administrative action or by filing a judicial suit at law in
257 a court of competent jurisdiction. However, in such court suit,
258 the bond, certificate of deposit, or letter of credit posted
259 with the division is office shall not be amenable or subject to
260 any judgment or other legal process issuing out of or from such
261 court in connection with such lawsuit, but is such bond,
262 certificate of deposit, or letter of credit shall be amenable to
263 and enforceable only by and through administrative proceedings
264 before the division office. It is the intent of the Legislature
265 that such bond, certificate of deposit, or letter of credit
266 shall be applicable and liable only for the payment of claims
267 duly adjudicated by order of the division office. The bond,
268 certificate of deposit, or letter of credit is shall be payable
269 on a pro rata basis as determined by the division office, but
270 the aggregate amount may not exceed the amount of the bond,
271 certificate of deposit, or letter of credit.
272 (4) The office shall approve an application and issue a
273 license if the office determines that the applicant satisfies
274 the requirements of this act.
275 Section 7. Section 537.006, Florida Statutes, is amended to
276 read:
277 537.006 Denial, suspension, or revocation of license.—
278 (1) The following acts are violations of this chapter act
279 and constitute grounds for the disciplinary actions specified in
280 subsection (2):
281 (a) Failure to comply with any provision of this chapter
282 act, any rule or order adopted pursuant to this chapter act, or
283 any written agreement entered into with the division office.
284 (b) Fraud, misrepresentation, deceit, or gross negligence
285 in any title loan transaction, regardless of reliance by or
286 damage to the borrower.
287 (c) Fraudulent misrepresentation, circumvention, or
288 concealment of any matter required to be stated or furnished to
289 a borrower pursuant to this chapter act, regardless of reliance
290 by or damage to the borrower.
291 (d) Imposition of illegal or unauthorized excessive charges
292 in any title loan transaction.
293 (e) False, deceptive, or misleading advertising by a title
294 loan lender.
295 (f) Failure to maintain, preserve, and keep available for
296 examination all books, accounts, or other documents required by
297 this chapter act, by any rule or order adopted pursuant to this
298 chapter act, or by any agreement entered into with the division
299 office.
300 (g) Aiding, abetting, or conspiring by a title loan lender
301 with a person to circumvent or violate any of the requirements
302 of this chapter act.
303 (h) Refusal to provide information upon division request of
304 the office, to permit inspection of books and records in an
305 investigation or examination by the division office, or to
306 comply with a subpoena issued by the division office.
307 (i) Pleading nolo contendere to or having been convicted or
308 found guilty, regardless of whether adjudication was withheld,
309 of a crime involving fraud, dishonest dealing, or any act of
310 moral turpitude or acting as an ultimate equitable owner of 10
311 percent or more of a licensee who has pled nolo contendere to or
312 has been convicted or found guilty, regardless of whether
313 adjudication was withheld, of a crime involving fraud, dishonest
314 dealing, or any act of moral turpitude.
315 (j) Making or having made material misstatement of fact in
316 an initial or renewal license application for a license.
317 (k) Having been the subject of any decision, finding,
318 injunction, suspension, prohibition, revocation, denial,
319 judgment, or administrative order by any court of competent
320 jurisdiction or administrative law judge, or by any state or
321 federal agency, involving a violation of any federal or state
322 law relating to title loans or any rule or regulation adopted
323 under such law, or has been the subject of any injunction or
324 adverse administrative order by a state or federal agency
325 regulating banking, insurance, finance or small loan companies,
326 real estate, mortgage brokers, or other related or similar
327 industries for acts involving fraud, dishonest dealing, or any
328 act of moral turpitude.
329 (l) Failing to continuously maintain the bond, certificate
330 of deposit, or letter of credit required by s. 537.005(3).
331 (m) Failing to timely pay any fee, charge, or fine imposed
332 or assessed pursuant to this chapter act or rules adopted under
333 this chapter act.
334 (n) Having a license or registration, or the equivalent, to
335 practice any profession or occupation denied, suspended,
336 revoked, or otherwise acted against by a licensing authority in
337 any jurisdiction for fraud, dishonest dealing, or any act of
338 moral turpitude.
339 (o) Having demonstrated unworthiness, as defined by
340 department commission rule, to transact the business of a title
341 loan lender.
342 (2) Upon a finding by the division office that any person
343 has committed any of the acts set forth in subsection (1), the
344 division office may enter an order taking one or more of the
345 following actions:
346 (a) Denying an application for licensure under this chapter
347 act.
348 (b) Revoking or suspending a license previously granted
349 pursuant to this chapter act.
350 (c) Placing a licensee or an applicant for a license on
351 probation for a period of time and subject to such conditions as
352 the division office specifies.
353 (d) Issuing a reprimand.
354 (e) Imposing an administrative fine of up to not to exceed
355 $5,000 for each separate act or violation.
356 (3) If a person seeking licensure is not anything other
357 than a natural person, the eligibility requirements of this
358 section apply to each direct or ultimate equitable owner of 10
359 percent or more of the outstanding equity interest of such
360 entity and to each director, general partner, and executive
361 officer.
362 (4) It is sufficient cause for the division office to take
363 any of the actions specified in subsection (2), as to any entity
364 other than a natural person, if the division office finds
365 grounds for such action as to any member of such entity, as to
366 any executive officer or director of the entity, or as to any
367 person with power to direct the management or policies of the
368 entity.
369 (5) Each licensee is subject to the provisions of
370 subsection (2) for the acts of employees and agents of the
371 licensee if the licensee knew or should have known about such
372 acts.
373 (6) Licensure under this chapter act may be denied, or any
374 license issued under this act may be suspended, or restricted if
375 an applicant or licensee is charged, in a pending enforcement
376 action or pending criminal prosecution, with any conduct that
377 would authorize denial or revocation under this section.
378 Section 8. Section 537.007, Florida Statutes, is amended to
379 read:
380 537.007 Remedies for title loans made without licensure.
381 Any title loan made without benefit of a license is void, and in
382 which case the person making the title loan forfeits the right
383 to collect any moneys, including principal and interest charged
384 on the title loan, from the borrower in connection with the
385 title loan such agreement. The person making the void title loan
386 must shall return to the borrower the certificate of title
387 serving as collateral for the loan with the lender’s lien
388 released loan property, the titled personal property pledged or
389 the fair market value of such titled personal property, and all
390 principal and interest paid by the borrower. The borrower is
391 entitled to receive reasonable attorney’s fees and costs in any
392 action brought by the borrower to recover the certificate of
393 title and any from the person making the title loan the loan
394 property, the titled personal property, or the principal and
395 interest paid by the borrower from the person making the void
396 title loan.
397 Section 9. Section 537.008, Florida Statutes, is amended to
398 read:
399 537.008 Title loan agreement.—
400 (1) At the time a title loan lender makes a title loan, the
401 lender and the borrower shall execute a title loan agreement,
402 which must shall be legibly typed or written in indelible ink
403 and completed as to all essential provisions before prior to
404 execution by the borrower and lender. The title loan agreement
405 must shall include the following information:
406 (a) The make, model, and year of the motor vehicle that
407 will serve as collateral for the loan titled personal property
408 to which the loan property relates.
409 (b) The vehicle identification number, or other comparable
410 identification number, along with the license plate number, if
411 applicable, of the motor vehicle that will serve as collateral
412 for the loan titled personal property to which the loan property
413 relates.
414 (c) The name, residential address, date of birth, physical
415 description, and social security number of the borrower.
416 (c)(d) The date the title loan agreement is executed by the
417 title loan lender and the borrower.
418 (d)(e) The identification number and the type of
419 identification, including the issuing agency, accepted from the
420 borrower.
421 (e) The maturity date of the title loan agreement, which
422 must be at least 120 days but no later than 1 year after the
423 date the title loan agreement is executed.
424 (f) The amount financed, finance charge, total number of
425 payments, and annual percentage rate, computed and disclosed in
426 accordance with the federal Truth in Lending Act and applicable
427 regulations.
428 (f) The amount of money advanced, designated as the “amount
429 financed.”
430 (g) The maturity date of the title loan agreement, which
431 shall be 30 days after the date the title loan agreement is
432 executed by the title loan lender and the borrower.
433 (h) The total title loan interest payable on the maturity
434 date, designated as the “finance charge.”
435 (i) The amount financed plus finance charge, which must be
436 paid to reclaim the loan property on the maturity date,
437 designated as the “total amount of all payments.”
438 (j) The interest rate, computed in accordance with the
439 regulations adopted by the Federal Reserve Board pursuant to the
440 federal Truth in Lending Act, designated as the “annual
441 percentage rate.”
442 (2) The following information must shall also be printed on
443 all title loan agreements:
444 (a) The name and physical address of the title loan office.
445 (b) The name and address of the department of Financial
446 Services as well as a telephone number to which consumers may
447 address complaints.
448 (c) The following statement immediately above the
449 borrower’s signature in at least not less than 12-point type
450 that:
451
452 THIS IS A MOTOR VEHICLE TITLE LOAN AGREEMENT. IT
453 ALLOWS YOU TO RECEIVE LOAN PROCEEDS TO MEET YOUR
454 IMMEDIATE CASH NEEDS AND IS NOT INTENDED TO MEET YOUR
455 LONG-TERM FINANCIAL NEEDS.
456
457 THE INTEREST RATE ON THIS LOAN IS HIGH. YOU SHOULD
458 CONSIDER WHETHER THERE ARE OTHER LOWER-COST LOANS
459 AVAILABLE TO YOU.
460
461 IF YOU DECIDE TO ACCEPT THIS LOAN, YOU SHOULD REQUEST
462 THE MINIMUM AMOUNT REQUIRED TO MEET YOUR IMMEDIATE
463 CASH NEEDS AND REPAY THE LOAN AS QUICKLY AS POSSIBLE
464 TO REDUCE THE AMOUNT OF INTEREST YOU ARE CHARGED.
465
466 YOU WILL BE REQUIRED TO PAY THE PRINCIPAL AND INTEREST
467 ON THE LOAN IN SUBSTANTIALLY EQUAL MONTHLY
468 INSTALLMENTS. YOU SHOULD TRY EACH MONTH TO PAY EVEN
469 MORE TOWARD YOUR PRINCIPAL BALANCE. DOING SO WILL SAVE
470 YOU MONEY BY REDUCING THE AMOUNT OF INTEREST OWED.
471
472 YOU MAY RESCIND THIS LOAN WITHOUT COST OR FURTHER
473 OBLIGATION IF YOU RETURN THE LOAN PROCEEDS, IN CASH OR
474 THE ORIGINAL LOAN CHECK, BEFORE THE CLOSE OF BUSINESS
475 ON THE NEXT BUSINESS DAY IMMEDIATELY FOLLOWING THE
476 EXECUTION OF THIS AGREEMENT.
477
478 YOU ARE PLEDGING YOUR MOTOR VEHICLE AS COLLATERAL FOR
479 THIS LOAN. IF YOU FAIL TO REPAY THE LOAN PURSUANT TO
480 THIS AGREEMENT, WE MAY REPOSSESS YOUR MOTOR VEHICLE.
481
482 UNLESS YOU CONCEAL OR INTENTIONALLY DAMAGE THE MOTOR
483 VEHICLE, OR OTHERWISE IMPAIR OUR SECURITY INTEREST BY
484 PLEDGING THE MOTOR VEHICLE TO A THIRD PARTY OR
485 PLEDGING A MOTOR VEHICLE TO US WHICH IS ALREADY
486 SUBJECT TO AN UNDISCLOSED LIEN, YOUR LIABILITY FOR
487 DEFAULTING UNDER THIS LOAN IS LIMITED TO THE LOSS OF
488 THE MOTOR VEHICLE.
489
490 IF YOUR MOTOR VEHICLE IS SOLD DUE TO YOUR DEFAULT ON
491 THIS LOAN, YOU ARE ENTITLED TO ANY SURPLUS OBTAINED AT
492 SUCH SALE LESS WHAT IS OWED PURSUANT TO THIS AGREEMENT
493 AND ANY REASONABLE COSTS OF RECOVERY, STORAGE, AND
494 SALE.
495
496 1. If the borrower fails to repay the full amount of the
497 title loan on or before the end of the maturity date or any
498 extension of the maturity date and fails to make a payment on
499 the title loan within 30 days after the end of the maturity date
500 or any extension of the maturity date, whichever is later, the
501 title loan lender may take possession of the borrower’s motor
502 vehicle and sell the vehicle in the manner provided by law. If
503 the vehicle is sold, the borrower is entitled to any proceeds of
504 the sale in excess of the amount owed on the title loan and the
505 reasonable expenses of repossession and sale.
506 2. If the title loan agreement is lost, destroyed, or
507 stolen, the borrower should immediately so advise the issuing
508 title loan lender in writing.
509 (d) The statement that “The borrower represents and
510 warrants that the motor vehicle serving as collateral for the
511 title loan titled personal property to which the loan property
512 relates is not stolen and has no liens or encumbrances against
513 it, the borrower has the right to enter into this transaction,
514 and the borrower will not apply for a duplicate certificate of
515 title while the title loan agreement is in effect.”
516 (e) A blank line for the signature of the borrower and the
517 title loan lender or the lender’s agent. All owners of the motor
518 vehicle titled personal property must sign the title loan
519 agreement.
520 (3) At the time of the transaction, the title loan lender
521 shall deliver to the borrower an exact copy of the executed
522 title loan agreement.
523 (4) Upon execution of a title loan agreement, the title
524 loan lender shall may take possession of the certificate of
525 title to the motor vehicle serving as collateral for the loan,
526 and within 7 business days record its lien on such title as
527 provided by law. The title loan lender shall loan property and
528 retain possession of the certificate of title such property
529 until the title loan is fully repaid such property is redeemed.
530 The borrower shall have the exclusive right to redeem the loan
531 property by repaying all amounts legally due under the
532 agreement. When the title loan property is fully repaid
533 redeemed, the lender shall immediately release its lien on the
534 certificate of title and return the certificate of title to the
535 borrower loan property and commence action to release any
536 security interest in the titled personal property. During the
537 term of the agreement or any extension of the agreement, a title
538 loan lender may retain physical possession of the loan property
539 only. A title loan lender may shall not require a borrower to
540 provide any additional collateral security or guaranty as a
541 condition to entering into a title loan transaction. A title
542 loan lender may not make a title loan if the certificate of
543 title to the motor vehicle that will serve as collateral for the
544 loan is security for another loan or is otherwise encumbered by
545 a lien.
546 Section 10. Section 537.0085, Florida Statutes, is created
547 to read:
548 537.0085 Rescission.—A licensee shall allow a borrower
549 under a title loan agreement to rescind the title loan without
550 cost or further obligation if the borrower returns the loan
551 proceeds in cash or the original loan check before the close of
552 business on the business day immediately following the execution
553 of the title loan agreement.
554 Section 11. Section 537.009, Florida Statutes, is amended
555 to read:
556 537.009 Recordkeeping; reporting; safekeeping of property.—
557 (1) Every title loan lender shall maintain, at the lender’s
558 title loan office, such books, accounts, and records of the
559 business conducted under the license issued for such place of
560 business as will enable the division office to determine the
561 licensee’s compliance with this chapter act.
562 (2) The division office may authorize the maintenance of
563 books, accounts, and records at a location other than the
564 lender’s title loan office. The division office may require
565 books, accounts, and records to be produced and available at a
566 reasonable and convenient location in this state within a
567 reasonable period of time after such a request.
568 (3) The title loan lender shall maintain the original copy
569 of each completed title loan agreement on the title loan office
570 premises, and may shall not obliterate, discard, or destroy any
571 such original copy, for a period of at least 2 years after
572 making the final entry on a any loan recorded in the such office
573 or after an examination by the Office of Financial Regulation,
574 whichever is later.
575 (4) Certificates of title that are held by Loan property
576 which is delivered to a title loan lender must shall be securely
577 stored and maintained at the title loan office unless the
578 certificate of title loan property has been forwarded to the
579 appropriate state agency for the purpose of having a lien
580 recorded or deleted.
581 (5) The department commission may prescribe by rule the
582 books, accounts, documents, and records, and the minimum
583 information to be shown in the books, accounts, documents, and
584 records, of licensees necessary for so that such records will
585 enable the division office to determine compliance with the
586 provisions of this chapter act. In addition, The department
587 commission may prescribe by rule requirements for the
588 destruction of books, accounts, records, and documents retained
589 by the licensee after completion of the time period specified in
590 subsection (3).
591 Section 12. Section 537.011, Florida Statutes, is amended
592 to read:
593 (Substantial rewording of section. See
594 s. 537.011, F.S., for present text.)
595 537.011 Title loan charges.—
596 (1) A licensee may charge and collect interest on a title
597 loan at rates up to the following amounts:
598 (a) Twenty-two percent per month on the portion of the
599 principal that does not exceed $700;
600 (b) Eighteen percent per month on the portion of the
601 principal that exceeds $700 but does not exceed $1,400; and
602 (c) Fifteen percent per month on the portion of the
603 principal that exceeds $1,400.
604 (2) The interest shall be charged only upon the outstanding
605 principal balance. Interest may not be charged on an add-on
606 basis and may not be compounded or paid, deducted, or received
607 in advance. On title loans in excess of $700, a licensee may
608 accrue interest using a single blended interest rate if the
609 maximum charge allowed under subsection (1) is not exceeded.
610 (3) Notwithstanding subsection (1) or the title loan
611 agreement, interest may not accrue on the principal balance of a
612 title loan from and after:
613 (a) The date that the motor vehicle securing the title loan
614 is repossessed by the licensee making the loan, unless the
615 licensee allows the borrower to redeem the vehicle with a loan
616 balance still owing, in which case interest accrual may restart
617 upon the borrower regaining possession of the motor vehicle; or
618 (b) Sixty days after the borrower has failed to make a
619 monthly payment on a title loan as required by the loan
620 agreement, unless the borrower has not surrendered the motor
621 vehicle and the borrower is concealing the motor vehicle. If the
622 borrower cures the default after the 60th day but before the
623 lender repossesses the motor vehicle, interest accrual may
624 restart upon such cure and any missing days of interest may be
625 added back to the account.
626 (4) Every title loan is a term loan providing for repayment
627 of the principal and interest in substantially equal monthly
628 installments of principal and interest. However, a loan
629 agreement may provide for an odd first payment period, and an
630 odd first payment greater than other monthly payments because of
631 such odd first payment period.
632 (5) A title loan agreement may not be extended, renewed, or
633 refinanced.
634 (6) A licensee may impose a late charge for failure to make
635 timely payment of any amount due under the loan agreement if
636 such late charge does not exceed the amount permitted by s.
637 516.031(3).
638 (7) The licensee must credit payments on the date received.
639 (8) Other than the loan principal, and interest and fees
640 permitted under this section, a licensee may not directly or
641 indirectly charge, contract for, collect, receive, recover, or
642 require a borrower to pay any further or other fee, charge, or
643 amount except for the licensee’s:
644 (a) Actual cost of perfecting its security interest in the
645 motor vehicle securing the borrower’s obligations under the
646 title loan agreement; and
647 (b) Reasonable and actual costs of repossession, storage,
648 and sale of the motor vehicle if the borrower defaults under the
649 terms of the title loan agreement.
650 (9) If any excess interest or fee is charged and such
651 charge resulted from a bona fide error by the title loan lender,
652 or an agent of the title loan lender, the lender shall refund
653 the excess interest or fee to the borrower within 30 days after
654 discovery by the lender or borrower of the error or within 30
655 days after notice of the error from the borrower, whichever
656 occurs first.
657 (10) If any excess interest or fee is charged by the title
658 loan lender, or an agent of the title loan lender, in an effort
659 to intentionally circumvent the maximum title loan interest and
660 fees allowed by this chapter, the title loan agreement is void
661 and the lender shall refund to the borrower any interest paid on
662 the title loan and return to the borrower the certificate of
663 title with the lender’s lien released. In such event, the title
664 loan lender forfeits the lender’s right to collect any principal
665 owed by the borrower on the title loan.
666 (11) The division may require a title loan lender, or an
667 agent of the title loan lender, to comply with subsections (9)
668 and (10).
669 Section 13. Section 537.012, Florida Statutes, is amended
670 to read:
671 (Substantial rewording of section. See
672 s. 537.012, F.S., for present text.)
673 537.012 Repossession.—Except as provided in subsection (5),
674 a licensee taking a security interest in a motor vehicle
675 pursuant to this chapter upon default by the borrower is limited
676 to seeking repossession of, preparing for sale, and selling the
677 motor vehicle securing the title loan in accordance with Article
678 9 of the Uniform Commercial Code.
679 (1) The licensee may not collect or charge the costs of
680 repossessing and selling the motor vehicle as described in s.
681 537.011(8)(b) unless the licensee, at least 10 days before
682 repossessing the motor vehicle, has sent to the borrower, by
683 first-class mail, written notice advising the borrower that his
684 or her title loan is in default and stating that the motor
685 vehicle securing the borrower’s title loan may be repossessed
686 unless the principal and interest owed under the loan agreement
687 are paid, and the borrower does not pay such principal and
688 interest before the date that the motor vehicle is repossessed
689 by or at the direction of the licensee. A licensee may not
690 repossess the motor vehicle before the date specified in the
691 notice. Except as provided in subsection (5), a licensee may not
692 seek or obtain a personal money judgment against a borrower for
693 any amount owed under a loan agreement or any deficiency
694 resulting after the sale of a motor vehicle. The notice
695 requirements of this subsection do not apply if the borrower
696 voluntarily surrenders the motor vehicle.
697 (2) At least 15 days before the sale of a motor vehicle, a
698 licensee shall notify the borrower of the date and time after
699 which the motor vehicle is subject to sale and provide the
700 borrower with a written accounting of the principal amount due,
701 interest accrued through the date that the licensee took
702 possession of the motor vehicle, and any reasonable expenses
703 incurred to date by the licensee in taking possession of,
704 preparing for sale, storing, and selling the motor vehicle. At
705 any time before such sale, the borrower may redeem the motor
706 vehicle by tendering cash, a certified check, or money order for
707 the amount owed to the licensee.
708 (3) Within 60 days after the licensee’s receipt of proceeds
709 from the sale of a motor vehicle, the borrower is entitled to
710 receive that portion of the proceeds which are in excess of the
711 principal amount due to the licensee, interest accrued through
712 the date the licensee took possession, and the reasonable
713 expenses incurred by the licensee in taking possession of,
714 storing, preparing for sale, and selling the motor vehicle.
715 (4) Except in the case of fraud or a voluntary surrender of
716 the motor vehicle, a licensee may not take possession of a motor
717 vehicle until a borrower is in default under the loan agreement.
718 (5) Notwithstanding any other provision of law, upon
719 default by a borrower, a licensee may seek a personal money
720 judgment against the borrower for any amounts owed under a loan
721 agreement if the borrower impairs the licensee’s security
722 interest by intentionally damaging or destroying the motor
723 vehicle, intentionally concealing the motor vehicle, giving the
724 licensee a lien in a motor vehicle that is already encumbered by
725 an undisclosed prior lien, or subsequently giving a security
726 interest in, or selling, a motor vehicle that secures a title
727 loan to a third party, without the licensee’s written consent.
728 Section 14. Section 537.013, Florida Statutes, is amended
729 to read:
730 537.013 Prohibited acts.—
731 (1) A title loan lender, or any agent or employee of a
732 title loan lender, may shall not:
733 (1)(a) Falsify or fail to make an entry of any material
734 matter in a title loan agreement or any extension of such
735 agreement.
736 (2)(b) Refuse to allow the division office to inspect
737 completed title loan agreements and supporting documentation,
738 extensions of such agreements, or loan property during the
739 ordinary operating hours of the title loan lender’s business or
740 other times acceptable to both parties.
741 (3)(c) Enter into a title loan agreement with a person
742 under the age of 18 years of age.
743 (4)(d) Make any agreement requiring or allowing for the
744 personal liability of a borrower beyond that allowed under s.
745 537.012 or the waiver of any provision of the provisions of this
746 chapter act.
747 (5)(e) Knowingly enter into a title loan agreement with any
748 person who is under the influence of drugs or alcohol if when
749 such condition is visible or apparent, or with any person using
750 a name other than the such person’s own name or the registered
751 name of the person’s business.
752 (6)(f) Fail to exercise reasonable care, as defined by
753 department commission rule, in the safekeeping of certificates
754 of title loan property or of motor vehicles titled personal
755 property repossessed pursuant to this chapter act.
756 (7)(g) Fail to return the borrower’s certificate of title
757 and the borrower’s motor vehicle if it has been repossessed loan
758 property or repossessed titled personal property to a borrower,
759 with any and all of the title loan lender’s liens on the
760 property properly released, upon payment of the full amount due
761 the title loan lender, unless the property has been seized or
762 impounded by an authorized law enforcement agency, taken into
763 custody by a court, or otherwise disposed of by court order. If
764 the borrower fully repays the loan and the certificate of title
765 is not in the title loan lender’s possession because the lender
766 sent the title to have the lender’s lien recorded and the title
767 has not yet been returned, the lender must release its lien and
768 return the title to the borrower within 3 days after regaining
769 possession of the certificate.
770 (8)(h) Sell or otherwise charge for any type of insurance
771 in connection with a title loan agreement.
772 (9)(i) Intentionally charge or receive any finance charge,
773 interest, or fees that which are not authorized pursuant to this
774 chapter, or fail to timely refund any finance charge, interest,
775 or fee not authorized pursuant to this chapter but received due
776 to a bona fide error act.
777 (10)(j) Act as a title loan lender without an active
778 license issued under this chapter act.
779 (11)(k) Refuse to accept partial payments toward satisfying
780 any obligation owed under a title loan agreement or extension of
781 such agreement.
782 (12)(l) Charge a prepayment penalty.
783 (13)(m) Engage in the business of selling new or used motor
784 vehicles, or parts for motor vehicles.
785 (14)(n) Act as a title loan lender under this act within a
786 place of business in which the licensee solicits or engages in
787 business outside the scope of this chapter act if the division
788 office determines that the licensee’s operation of and conduct
789 pertaining to such other business results in an evasion of this
790 chapter act. Upon making such a determination, the division
791 office shall order the licensee to cease and desist from such
792 evasion. A; provided, no licensee may not shall engage in the
793 pawnbroker business or the deferred presentment business, or
794 allow others to engage in such businesses from the licensee’s
795 title loan office.
796 (15) Cause any borrower to be obligated on a title loan in
797 a principal amount that exceeds 50 percent of the fair market
798 value of the motor vehicle in which the licensee is taking a
799 security interest, which value shall be determined by reference
800 to the market value for the motor vehicle specified in a
801 recognized pricing guide if the motor vehicle is included in a
802 recognized pricing guide.
803 (2) Title loan companies may not advertise using the words
804 “interest free loans” or “no finance charges.”
805 Section 15. Section 537.014, Florida Statutes, is repealed.
806 Section 16. Section 537.015, Florida Statutes, is amended
807 to read:
808 537.015 Criminal penalties.—
809 (1) Any person who acts as a title loan lender without
810 first securing the license prescribed by this chapter act
811 commits a felony of the third degree, punishable as provided in
812 s. 775.082, s. 775.083, or s. 775.084.
813 (2) In addition to any other applicable penalty, any person
814 who willfully violates any provision of this chapter act or who
815 willfully makes a false entry in any record specifically
816 required by this chapter act commits a misdemeanor of the first
817 degree, punishable as provided in s. 775.082 or s. 775.083.
818 Section 17. Section 537.016, Florida Statutes, is amended
819 to read:
820 537.016 Subpoenas; enforcement actions; rules.—
821 (1) The division office may issue and serve subpoenas to
822 compel the attendance of witnesses and the production of
823 documents, papers, books, records, and other evidence before the
824 office in any matter pertaining to this chapter act. The
825 division office may administer oaths and affirmations to any
826 person whose testimony is required. If any person refuses to
827 testify; produce books, records, and documents; or otherwise
828 refuses to obey a subpoena issued under this section, the
829 division office may enforce the subpoena in the same manner as
830 subpoenas issued under the Administrative Procedure Act are
831 enforced. Witnesses are entitled to the same fees and mileage as
832 they are entitled to by law for attending as witnesses in the
833 circuit court, unless such examination or investigation is held
834 at the place of business or residence of the witness.
835 (2) In addition to any other powers conferred upon the
836 division office to enforce or administer this chapter act, the
837 division office may:
838 (a) Bring a civil an action in any court of competent
839 jurisdiction to enforce or administer this chapter act, any rule
840 or order adopted under this chapter act, or any written
841 agreement entered into with the division office. In such action,
842 the division office may seek any relief at law or equity,
843 including a temporary or permanent injunction, appointment of a
844 receiver or administrator, or an order of restitution.
845 (b) Issue and serve upon a person an order requiring such
846 person to cease and desist and take corrective action if
847 whenever the division office finds that such person is
848 violating, has violated, or is about to violate any provision of
849 this chapter act, any rule or order adopted under this chapter
850 act, or any written agreement entered into with the division
851 office.
852 (c) If Whenever the division office finds that conduct
853 described in paragraph (b) presents an immediate danger to the
854 public health, safety, or welfare requiring an immediate final
855 order, the office may issue an emergency cease and desist order
856 reciting with particularity the facts underlying such findings.
857 The emergency cease and desist order is effective immediately
858 upon service of a copy of the order on the respondent named in
859 the order and remains shall remain effective for 90 days. If the
860 division office begins nonemergency proceedings under paragraph
861 (b), the emergency cease and desist order remains effective
862 until the conclusion of the proceedings under ss. 120.569 and
863 120.57.
864 (3) The department commission may adopt rules to administer
865 this chapter act.
866 Section 18. Section 537.017, Florida Statutes, is amended
867 to read:
868 537.017 Investigations and complaints.—
869 (1) The division office may make any investigation and
870 examination of any licensee or other person the division office
871 deems necessary to determine compliance with this chapter act.
872 For such purposes, the division office may examine the books,
873 accounts, records, and other documents or matters of any
874 licensee or other person. The office may compel the production
875 of all relevant books, records, and other documents and
876 materials relative to an examination or investigation.
877 Examinations may shall not be made more often than once during
878 any 12-month period unless the division office has reason to
879 believe the licensee is not complying with the provisions of
880 this chapter act.
881 (2) The division office shall conduct all examinations at a
882 convenient location in this state unless the division office
883 determines that it is more effective or cost-efficient to
884 perform an examination at the licensee’s out-of-state location.
885 For an examination performed at the licensee’s out-of-state
886 location, the licensee shall pay the travel expense and per diem
887 subsistence at the rate provided by law for up to thirty 8-hour
888 days per year for each division office examiner who participates
889 in such an examination. However, if the examination involves or
890 reveals possible fraudulent conduct by the licensee, the
891 licensee shall pay the travel expenses and per diem subsistence
892 provided by law, without limitation, for each participating
893 examiner.
894 (3) Any person having reason to believe that any provision
895 of this chapter act has been violated may file with the
896 department of Financial Services or the division office a
897 written complaint setting forth the details of the such alleged
898 violation, and the division office may investigate such
899 complaint.
900 Section 19. Section 537.018, Florida Statutes, is repealed.
901 Section 20. Section 494.00797, Florida Statutes, is amended
902 to read:
903 494.00797 General rule.—All counties and municipalities of
904 this state are prohibited from enacting and enforcing
905 ordinances, resolutions, and rules regulating financial or
906 lending activities, including ordinances, resolutions, and rules
907 disqualifying persons from doing business with a city, county,
908 or municipality based upon lending interest rates or imposing
909 reporting requirements or any other obligations upon persons
910 regarding financial services or lending practices of persons or
911 entities, and any subsidiaries or affiliates thereof, who:
912 (1) Are subject to the jurisdiction of the office and the
913 Department of Agriculture and Consumer Services, as applicable,
914 including for activities subject to this chapter, except
915 entities licensed under s. 537.004;
916 (2) Are subject to the jurisdiction of the Office of Thrift
917 Supervision, the Office of the Comptroller of the Currency, the
918 National Credit Union Administration, the Federal Deposit
919 Insurance Corporation, the Federal Trade Commission, or the
920 United States Department of Housing and Urban Development;
921 (3) Originate, purchase, sell, assign, secure, or service
922 property interests or obligations created by financial
923 transactions or loans made, executed, or originated by persons
924 referred to in subsection (1) or subsection (2) to assist or
925 facilitate such transactions;
926 (4) Are chartered by the United States Congress to engage
927 in secondary market mortgage transactions; or
928 (5) Are created by the Florida Housing Finance Corporation.
929
930 Proof of noncompliance with this part act can be used by a city,
931 county, or municipality of this state to disqualify a vendor or
932 contractor from doing business with a city, county, or
933 municipality of this state.
934 Section 21. All powers, duties, functions, records,
935 offices, personnel, property, pending issues and existing
936 contracts, administrative authority, administrative rules, and
937 unexpended balances of appropriations, allocations, and other
938 funds relating to the regulation of title loans under chapter
939 537, Florida Statutes, in the Department of Financial Services
940 are transferred by a type two transfer, as defined in s.
941 20.06(2), Florida Statutes, to the Department of Agriculture and
942 Consumer Services.
943 Section 22. This act shall take effect July 1, 2011.