HB 67

1	A bill to be entitled
2	An act relating to credit counseling services;
3	amending s. 817.801, F.S.; defining terms; revising
4	definitions; amending s. 817.802, F.S.; conforming a
5	cross-reference; creating s. 817.8035, F.S.; requiring
6	that debt management and credit counseling services be
7	provided pursuant to a debt settlement plan; requiring
8	a credit counseling agency to make certain disclosures
9	to the debtor before a debtor consents to payment;
10	prohibiting a credit counseling agency from making
11	certain misrepresentations to a debtor; providing
12	certain conditions that a credit counseling agency
13	must meet before receiving payment; providing that a
14	debtor may withdraw any account funds placed with a
15	credit counseling agency at any time without penalty;
16	amending s. 817.805, F.S.; authorizing a credit
17	counseling agency to hold funds in order to allow the
18	funds to accumulate; providing an effective date.
19
20	Be It Enacted by the Legislature of the State of Florida:
21
22	Section 1.  Section 817.801, Florida Statutes, is amended
23	to read:
24	817.801  Definitions.-As used in this part:
25	(1)  "Credit counseling agency" means any organization
26	providing debt management services, debt settlement services, or
27	credit counseling services for compensation.
28	(2)  "Credit counseling services" means confidential money
29	management, debt reduction, and financial educational services.
30	(3)  "Creditor contribution" means any sum that a creditor
31	agrees to contribute to a credit counseling agency, whether
32	directly or by setoff against amounts otherwise payable to the
33	creditor on behalf of debtors.
34	(4)  "Debt management plan" means a written agreement or
35	contract between a credit counseling agency and a debtor whereby
36	the credit counseling agency, in return for a direct or indirect
37	payment by the debtor of fees not exceeding those in s. 817.802,
38	will provide credit counseling services or debt management
39	services that contemplate that creditors will reduce finance
40	charges or fees for late payment, default, or delinquency.
41	(5)(4)  "Debt management services" means services provided
42	to a debtor by a credit counseling organization for a fee to:
43	(a)  Effect the adjustment, compromise, reduction of
44	interest rate or fees, modification of terms, or negotiation or
45	discharge of any unsecured account, note, or other indebtedness
46	of the debtor; or
47	(b)  Receive from the debtor and disburse to a creditor any
48	money or other thing of value with the expectation that the
49	debtor will repay the entire principal amount owed to the
50	creditor.
51	(6)  "Debt settlement plan" means a written agreement or
52	contract between a credit counseling agency and a debtor whereby
53	the credit counseling agency, in return for payment by the
54	debtor, will provide debt settlement services that contemplate
55	that creditors will settle debts for less than the principal
56	amount of the debt.
57	(7)  "Debt settlement services" means services provided to
58	a debtor with the expectation of obtaining the creditor's
59	agreement to accept less than the principal amount of debt in
60	full satisfaction of the debt.
61	(8)(5)  "Person" means any individual, corporation,
62	partnership, trust, association, or other legal entity.
63	Section 2.  Subsection (1) of section 817.802, Florida
64	Statutes, is amended to read:
65	817.802  Unlawful fees and costs.-
66	(1)  It is unlawful for any person, while engaging in debt
67	management services or credit counseling services, to charge or
68	accept from a debtor residing in this state, directly or
69	indirectly, a fee or contribution greater than $50 for the
70	initial setup or initial consultation. Subsequently, the person
71	may not charge or accept a fee or contribution from a debtor
72	residing in this state greater than $120 per year for additional
73	consultations or, alternatively, if debt management services as
74	defined in s. 817.801(5)(b) 817.801(4)(b) are provided, the
75	person may charge the greater of 7.5 percent of the amount paid
76	monthly by the debtor to the person or $35 per month.
77	Section 3.  Section 817.8035, Florida Statutes, is created
78	to read:
79	817.8035  Debt settlement plans; disclosures to debtor;
80	payments; refunds.-
81	(1)  Debt settlement services or credit counseling services
82	provided to a debtor residing in this state may be provided only
83	pursuant to a debt settlement plan that complies with this part.
84	(2)  Before a debtor consents to payment for debt
85	settlement services, the credit counseling agency must disclose
86	truthfully, in a clear and conspicuous manner, all of the
87	following material information:
88	(a)  The amount of time necessary to achieve the
89	represented results and, to the extent that the debt settlement
90	service may include a settlement offer to any of the debtor's
91	creditors or debt collectors, the anticipated time by which the
92	credit counseling agency will make a bona fide settlement offer
93	to each of them.
94	(b)  To the extent that the debt settlement service may
95	include a settlement offer to any of the debtor's creditors or
96	debt collectors, the amount of money or the percentage of each
97	outstanding debt that the debtor must accumulate before the
98	credit counseling agency will make a bona fide settlement offer
99	to each of them.
100	(c)  To the extent that any aspect of the debt settlement
101	service relies upon or results in the debtor's failure to make
102	timely payments to creditors or debt collectors, that the use of
103	the debt settlement service will likely adversely affect the
104	debtor's creditworthiness, may result in the debtor being
105	subject to collection actions or sued by creditors or debt
106	collectors, and may increase the amount of money the debtor owes
107	due to the accrual of fees and interest.
108	(d)  To the extent that the credit counseling agency
109	requests or requires the debtor to place funds in an account at
110	an insured financial institution, that the debtor owns the funds
111	held in the account, the debtor may withdraw such funds from the
112	debt settlement service at any time without penalty, and, if the
113	debtor requests to withdraw such funds, the debtor must receive
114	all funds in the account, other than funds earned by the credit
115	counseling agency, within 7 business days after the debtor's
116	request.
117	(3)  The credit counseling agency shall provide the debtor
118	with a copy of the disclosures required under subsection (2)
119	within 7 days after the debtor consents to pay the credit
120	counseling agency for debt settlement services.
121	(4)  A credit counseling agency may not misrepresent,
122	directly or by implication, any material aspect of any debt
123	management service, including, but not limited to, the amount of
124	money or the percentage of the debt amount which a debtor may
125	save by using such service; the amount of time necessary to
126	achieve the represented results; the amount of money or the
127	percentage of each outstanding debt the debtor must accumulate
128	before the credit counseling agency will initiate attempts or
129	make a bona fide offer to negotiate, settle, or modify the terms
130	of the debtor's debt with the debtor's creditors or debt
131	collectors; the effect of the service on a debtor's
132	creditworthiness; the effect of the service on the collection
133	efforts of the debtor's creditors or debt collectors; the
134	percentage or number of debtors who attain the represented
135	results; and whether a debt settlement service is offered or
136	provided by a nonprofit entity.
137	(5)  A credit counseling agency may not receive payment of
138	any fee or consideration for any debt settlement service until:
139	(a)  The credit counseling agency has renegotiated,
140	settled, reduced, or otherwise altered the terms of at least one
141	debt pursuant to a debt settlement plan;
142	(b)  The debtor has made at least one payment pursuant to
143	that debt settlement plan; and
144	(c)  The fee or consideration for settling each individual
145	debt enrolled in a debt settlement plan:
146	1.  Bears the same proportional relationship to the total
147	fee for settling the entire debt balance as the individual debt
148	amount bears to the entire debt amount. The individual debt
149	amount and the entire debt amount are those owed at the time the
150	debtor enrolled in the debt management service; or
151	2.  Is a percentage of the amount saved as a result of the
152	settlement. The percentage charged may not change from one
153	individual debt to another and may not exceed 30 percent of the
154	amount saved. The amount saved is the difference between the
155	amount owed at the time the debtor enrolled in the debt
156	settlement service and the amount actually paid to satisfy the
157	debt.
158	(6)  This section does not prohibit a credit counseling
159	agency from requesting or requiring the debtor to place funds in
160	an account to be used for the credit counseling agency's fees
161	and for payments to creditors or debt collectors in connection
162	with a renegotiation, settlement, reduction, or other alteration
163	of the terms of payment or other terms of a debt if:
164	(a)  The funds are held in an account at an insured
165	financial institution;
166	(b)  The debtor owns the funds held in the account and is
167	paid accrued interest on the account, if any;
168	(c)  The entity administering the account, if the credit
169	counseling agency does not administer the account, is not owned
170	or controlled by, or in any way affiliated with, the credit
171	counseling agency; and
172	(d)  The entity administering the account does not give or
173	accept any money or other compensation in exchange for referrals
174	of business by the credit counseling agency.
175	(7)  The debtor may withdraw from the debt settlement
176	service at any time without penalty, and must receive all funds
177	held in the account, other than funds earned by the credit
178	counseling agency in compliance with this part, within 7
179	business days after the debtor's request.
180	Section 4.  Section 817.805, Florida Statutes, is amended
181	to read:
182	817.805  Disbursement of funds.-Any person engaged in debt
183	management, debt settlement, or credit counseling services shall
184	disburse to the appropriate creditors all funds received from a
185	debtor, less any fees permitted by s. 817.802 and any creditor
186	contributions, within 30 days after receipt of such funds,
187	unless the reasonable payment of one or more of the debtor's
188	obligations requires that the funds be held for a longer period
189	in order to accumulate. However, a creditor contribution may not
190	reduce any sums to be credited to the account of a debtor making
191	a payment to the credit counseling agency for further payment to
192	the creditor. Further, any person engaged in such services shall
193	maintain a separate trust account for the receipt of any funds
194	from debtors and the disbursement of such funds on behalf of
195	such debtors.
196	Section 5.  This act shall take effect October 1, 2012.

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