Florida Senate - 2014                                    SB 1006
       By Senator Hays
       11-00402B-14                                          20141006__
    1                        A bill to be entitled                      
    2         An act relating to consumer collection practices;
    3         amending s. 559.55, F.S.; defining terms; amending s.
    4         559.553, F.S.; removing provisions relating to the
    5         revocation or suspension of a professional license
    6         which allow the Office of Financial Regulation to
    7         reject an applicant for registration; conforming a
    8         cross-reference to changes made by the act; creating
    9         s. 559.554, F.S.; providing for the powers and duties
   10         of the Financial Services Commission and the Office of
   11         Financial Regulation; creating s. 559.5541, F.S.;
   12         authorizing the office to conduct examinations and
   13         investigations; amending s. 559.555, F.S.; revising
   14         requirements for registration as a consumer collection
   15         agency; specifying a registration fee; creating s.
   16         559.5551, F.S.; requiring registrants to report,
   17         within a specified time period, a conviction of, or
   18         plea of nolo contendere to, a crime or an
   19         administrative enforcement action; requiring
   20         registrants to report, within a specified time period,
   21         a change in a control person or the form of the
   22         organization, or any other change in the information
   23         supplied in the initial application; amending s.
   24         559.565, F.S.; conforming a cross-reference to changes
   25         made by the act; amending s. 559.730, F.S.; revising
   26         the administrative remedies and penalties available to
   27         the office; requiring the commission to adopt
   28         guidelines to impose administrative penalties;
   29         providing an effective date.
   31  Be It Enacted by the Legislature of the State of Florida:
   33         Section 1. Section 559.55, Florida Statutes, is reordered
   34  and amended to read:
   35         559.55 Definitions.—The following terms shall, unless the
   36  context otherwise indicates, have the following meanings for the
   37  purpose of this part:
   38         (1) “Commission” means the Financial Services Commission.
   39         (6)(1) “Debt” or “consumer debt” means any obligation or
   40  alleged obligation of a consumer to pay money arising out of a
   41  transaction in which the money, property, insurance, or services
   42  that which are the subject of the transaction are primarily for
   43  personal, family, or household purposes, whether or not such
   44  obligation has been reduced to judgment.
   45         (8)(2) “Debtor” or “consumer” means any natural person
   46  obligated or allegedly obligated to pay any debt.
   47         (4) “Control person” means an individual, partnership,
   48  corporation, trust, or organization that possesses the power,
   49  directly or indirectly, to direct the management or policies of
   50  a company, whether through ownership of securities, by contract,
   51  or otherwise. The term includes, but is not limited to:
   52         (a) A company’s executive officers, including the
   53  president, chief executive officer, chief financial officer,
   54  chief operations officer, chief legal officer, chief compliance
   55  officer, director, and other individuals having similar status
   56  or functions.
   57         (b) For a corporation, a shareholder who, directly or
   58  indirectly, owns 10 percent or more or that has the power to
   59  vote 10 percent or more, of a class of voting securities unless
   60  the applicant is a publicly traded company.
   61         (c) For a partnership, all general partners and limited or
   62  special partners who have contributed 10 percent or more or that
   63  have the right to receive, upon dissolution, 10 percent or more
   64  of the partnership’s capital.
   65         (d) For a trust, each trustee.
   66         (e) For a limited liability company, all elected managers
   67  and those members who have contributed 10 percent or more or
   68  that have the right to receive, upon dissolution, 10 percent or
   69  more of the partnership’s capital.
   70         (5)(3) “Creditor” means a any person who offers or extends
   71  credit creating a debt or to whom a debt is owed. The term, but
   72  does not include a any person to the extent that they receive an
   73  assignment or transfer of a debt in default solely for the
   74  purpose of facilitating collection of such debt for another.
   75         (10)(4) “Office” means the Office of Financial Regulation
   76  of the Financial Services commission.
   77         (2)(5) “Communication” means the conveying of information
   78  regarding a debt, directly or indirectly, to a any person
   79  through any medium.
   80         (7)(6) “Debt collector” means a any person who uses an any
   81  instrumentality of commerce within this state, whether initiated
   82  from within or outside this state, in any business the principal
   83  purpose of which is the collection of debts, or who regularly
   84  collects or attempts to collect, directly or indirectly, debts
   85  owed or due or asserted to be owed or due another. The term
   86  “debt collector” includes a any creditor who, in the process of
   87  collecting her or his own debts, uses a any name other than her
   88  or his own which would indicate that a third person is
   89  collecting or attempting to collect such debts. The term does
   90  not include:
   91         (a) An Any officer or employee of a creditor while, in the
   92  name of the creditor, collecting debts for such creditor;
   93         (b) A Any person while acting as a debt collector for
   94  another person, both of whom are related by common ownership or
   95  affiliated by corporate control, if the person acting as a debt
   96  collector for persons to whom it is so related or affiliated and
   97  if the principal business of such persons is not the collection
   98  of debts;
   99         (c) An Any officer or employee of any federal, state, or
  100  local governmental body to the extent that collecting or
  101  attempting to collect any debt is in the performance of her or
  102  his official duties;
  103         (d) A Any person while serving or attempting to serve legal
  104  process on another any other person in connection with the
  105  judicial enforcement of a any debt;
  106         (e) A Any not-for-profit organization which, at the request
  107  of consumers, performs bona fide consumer credit counseling and
  108  assists consumers in the liquidation of their debts by receiving
  109  payments from such consumers and distributing such amounts to
  110  creditors; or
  111         (f) A Any person collecting or attempting to collect any
  112  debt owed or due or asserted to be owed or due another to the
  113  extent that such activity is incidental to a bona fide fiduciary
  114  obligation or a bona fide escrow arrangement; concerns a debt
  115  which was originated by such person; concerns a debt which was
  116  not in default at the time it was obtained by such person; or
  117  concerns a debt obtained by such person as a secured party in a
  118  commercial credit transaction involving the creditor.
  119         (3)(7) “Consumer collection agency” means a any debt
  120  collector or business entity engaged in the business of
  121  soliciting consumer debts for collection or of collecting
  122  consumer debts, which debt collector or business is not
  123  expressly exempted as specified in s. 559.553(3) set forth in s.
  124  559.553(4).
  125         (11)(8) “Out-of-state consumer debt collector” means a any
  126  person whose business activities in this state involve both
  127  collecting or attempting to collect consumer debt from debtors
  128  located in this state by means of interstate communication
  129  originating from outside this state and soliciting consumer debt
  130  accounts for collection from creditors who have a business
  131  presence in this state. For purposes of this subsection, a
  132  creditor has a business presence in this state if either the
  133  creditor or an affiliate or subsidiary of the creditor has an
  134  office in this state.
  135         (9) “Federal Fair Debt Collection Practices Act” or
  136  “Federal Act” means the federal legislation regulating fair debt
  137  collection practices, as specified set forth in Pub. L. No. 95
  138  109, as amended and published in 15 U.S.C. ss. 1692 et seq.
  139         Section 2. Section 559.553, Florida Statutes, is amended to
  140  read:
  141         559.553 Registration of consumer collection agencies
  142  required; exemptions.—
  143         (1) A After January 1, 1994, no person may not shall engage
  144  in business in this state as a consumer collection agency or
  145  continue to do business in this state as a consumer collection
  146  agency without first registering in accordance with this part,
  147  and thereafter maintaining a valid registration.
  148         (2) Each consumer collection agency doing business in this
  149  state shall register with the office and renew such registration
  150  annually as set forth in s. 559.555.
  151         (3) A prospective registrant shall be entitled to be
  152  registered when registration information is complete on its face
  153  and the applicable registration fee has been paid; however, the
  154  office may reject a registration submitted by a prospective
  155  registrant if the registrant or any principal of the registrant
  156  previously has held any professional license or state
  157  registration which was the subject of any suspension or
  158  revocation which has not been explained by the prospective
  159  registrant to the satisfaction of the office either in the
  160  registration information submitted initially or upon the
  161  subsequent written request of the office. In the event that an
  162  attempted registration is rejected by the office the prospective
  163  registrant shall be informed of the basis for rejection.
  164         (3)(4) This section does shall not apply to:
  165         (a) An Any original creditor.
  166         (b) A Any member of The Florida Bar.
  167         (c) A Any financial institution authorized to do business
  168  in this state and any wholly owned subsidiary and affiliate
  169  thereof.
  170         (d) A Any licensed real estate broker.
  171         (e) An Any insurance company authorized to do business in
  172  this state.
  173         (f) A Any consumer finance company and any wholly owned
  174  subsidiary and affiliate thereof.
  175         (g) A Any person licensed pursuant to chapter 520.
  176         (h) An Any out-of-state consumer debt collector who does
  177  not solicit consumer debt accounts for collection from credit
  178  grantors who have a business presence in this state.
  179         (i) An Any FDIC-insured institution or subsidiary or
  180  affiliate thereof.
  181         (4)(5)An Any out-of-state consumer debt collector as
  182  defined in s. 559.55(11) s. 559.55(8) who is not exempt from
  183  registration by application of subsection (3) (4) and who fails
  184  to register in accordance with this part shall be subject to an
  185  enforcement action by the state as specified in s. 559.565.
  186         Section 3. Section 559.554, Florida Statutes, is created to
  187  read:
  188         559.554 Powers and duties of the commission and office.—
  189         (1) The office is responsible for the administration and
  190  enforcement of this part.
  191         (2) The commission may adopt rules to administer this part,
  192  including rules:
  193         (a) Requiring electronic submission of forms, documents,
  194  and fees required by this part.
  195         (b) Establishing time periods during which a consumer
  196  collection agency is barred from registration due to prior
  197  criminal convictions of, or guilty or nolo contendere pleas by,
  198  an applicant’s control persons, regardless of adjudication.
  199         1. The rules must provide:
  200         a. A 15-year disqualifying period for felonies involving
  201  fraud, dishonesty, breach of trust, money laundering, or other
  202  acts of moral turpitude.
  203         b. A 7-year disqualifying period for felonies not specified
  204  in sub-subparagraph a.
  205         c. A 5-year disqualifying period for misdemeanors involving
  206  fraud, dishonesty, or other acts of moral turpitude.
  207         2. The rules must provide for an additional waiting period
  208  due to dates of imprisonment or community supervision, the
  209  commitment of multiple crimes, and other factors reasonably
  210  related to the applicant’s criminal history.
  211         3. The rules must provide for mitigating factors for crimes
  212  identified in sub-subparagraphs 1.a.-c.
  213         4. An applicant is not eligible for registration until
  214  expiration of the disqualifying period set by rule.
  215         5. Section 112.011 does not apply to eligibility for
  216  registration under this part.
  217         (3) All fees, charges, and fines collected pursuant to this
  218  part shall be deposited into the Regulatory Trust Fund of the
  219  office.
  220         Section 4. Section 559.5541, Florida Statutes, is created
  221  to read:
  222         559.5541 Examinations and investigations.—
  223         (1) Notwithstanding s. 559.725(4), the office may, without
  224  advance notice, conduct examinations and investigations, within
  225  or outside this state, to determine whether a person has
  226  violated this part or related rules. For purposes of this
  227  section, the office may examine the books, accounts, records,
  228  and other documents or matters of any person subject to this
  229  part. The office may compel the production of all relevant
  230  books, records, and other documents and materials relative to an
  231  examination or investigation. Examinations may not be made more
  232  often than once during a 48-month period unless the office has
  233  reason to believe a person has violated or will violate this
  234  part or related rules.
  235         (2) In order to reduce the burden on persons subject to
  236  this part, the office may conduct a joint or concurrent
  237  examination with a state or federal regulatory agency and may
  238  furnish a copy of all examinations to an appropriate regulator
  239  if the regulator agrees to abide by the confidentiality
  240  provisions in chapter 119 and this part. The office may also
  241  accept an examination from any appropriate regulator.
  242         Section 5. Section 559.555, Florida Statutes, is amended to
  243  read:
  244         559.555 Registration of consumer collection agencies;
  245  procedure.—
  246         (1) A Any person who acts required to register as a
  247  consumer collection agency must be registered in accordance with
  248  this section. shall furnish to the office the registration fee
  249  and information as follows:
  250         (2) In order to apply for a consumer collection agency
  251  registration, an applicant must:
  252         (a) Submit a completed application form as prescribed by
  253  rule of the commission.
  254         (b) Submit a nonrefundable application fee of $200.
  255  Application fees may not be prorated for partial years of
  256  registration.
  257         (c) Submit fingerprints for each of the applicant’s control
  258  persons in accordance with rules adopted by the commission.
  259         1. The fingerprints may be submitted through a third-party
  260  vendor authorized by the Department of Law Enforcement to
  261  provide live-scan fingerprinting.
  262         2. A state criminal history background check must be
  263  conducted through the Department of Law Enforcement, and a
  264  federal criminal history background check must be conducted
  265  through the Federal Bureau of Investigation.
  266         3. All fingerprints submitted to the Department of Law
  267  Enforcement must be submitted electronically and entered into
  268  the statewide automated biometric identification system
  269  established in s. 943.05(2)(b) and available for use in
  270  accordance with s. 943.05(2)(g) and (h). The office shall pay an
  271  annual fee to the Department of Law Enforcement to participate
  272  in the system and inform the Department of Law Enforcement of
  273  any person whose fingerprints are no longer required to be
  274  retained.
  275         4. The costs of fingerprint processing, including the cost
  276  of retaining the fingerprints, shall be borne by the person
  277  subject to the background check.
  278         5. The office is responsible for reviewing the results of
  279  the state and federal criminal history background checks and
  280  determining whether the applicant meets registration
  281  requirements.
  282         (3) The office shall issue a consumer collection agency
  283  registration to each person who is not otherwise ineligible and
  284  who meets the requirements of this section. However, it is a
  285  ground for denial of registration if the applicant or one of the
  286  applicant’s control persons has committed any violation
  287  specified in this part, or is the subject of a pending felony
  288  criminal prosecution or a prosecution or an administrative
  289  enforcement action, in any jurisdiction, which involves fraud,
  290  dishonesty, breach of trust, money laundering, or any other act
  291  of moral turpitude.
  292         (4) A registration issued under this part is not
  293  transferable or assignable.
  294         (5) A consumer collection agency shall report, on a form
  295  prescribed by rule of the commission, any change in the
  296  information contained in an initial application form, or an
  297  amendment thereto, within 30 days after the change is effective.
  298         (1) The registrant shall pay to the office a registration
  299  fee in the amount of $200. All amounts collected shall be
  300  deposited by the office to the credit of the Regulatory Trust
  301  Fund of the office.
  302         (2) Each registrant shall provide to the office the
  303  business name or trade name, the current mailing address, the
  304  current business location which constitutes its principal place
  305  of business, and the full name of each individual who is a
  306  principal of the registrant. “Principal of a registrant” means
  307  the registrant’s owners if a partnership or sole proprietorship,
  308  corporate officers, corporate directors other than directors of
  309  a not-for-profit corporation organized pursuant to chapter 617
  310  and Florida resident agent if a corporate registrant. The
  311  registration information shall include a statement clearly
  312  identifying and explaining any occasion on which any
  313  professional license or state registration held by the
  314  registrant, by any principal of the registrant, or by any
  315  business entity in which any principal of the registrant was the
  316  owner of 10 percent or more of such business, was the subject of
  317  any suspension or revocation.
  318         (6)(3) Renewal of registration shall be made between
  319  October 1 and December 31 of each year. There shall be no
  320  proration of the fee for any registration. In order to renew a
  321  consumer collection agency registration, a registrant must
  322  submit a nonrefundable renewal fee equal to the registration fee
  323  and a nonrefundable fee to cover the costs of further
  324  fingerprint processing and retention as set forth by commission
  325  rule.
  326         (7)A consumer collection agency registrant whose initial
  327  registration is approved and issued by the office pursuant to
  328  this section before October 1, 2014, who seeks renewal of the
  329  registration must submit fingerprints for each control person
  330  for live-scan processing pursuant to paragraph (2)(c). Such
  331  fingerprints must be submitted before renewing a registration
  332  that is scheduled to expire December 31, 2014.
  333         Section 6. Section 559.5551, Florida Statutes, is created
  334  to read:
  335         559.5551 Requirements of registrants.—A registrant under
  336  this part shall report to the office in a manner prescribed by
  337  rule of the commission:
  338         (1) A conviction of, or plea of nolo contendere to,
  339  regardless of adjudication, a crime or administrative violation
  340  that involves fraud, dishonesty, breach of trust, money
  341  laundering, or any other act of moral turpitude, in any
  342  jurisdiction, by the registrant or any control person within 30
  343  days after the date of conviction, entry of a plea of nolo
  344  contendere, or final administrative action.
  345         (2) A conviction of, or plea of nolo contendere to,
  346  regardless of adjudication, a felony committed by the registrant
  347  or any control person within 30 days after the date of
  348  conviction or the date the plea of nolo contendere is entered.
  349         (3) A change to the information contained in an initial
  350  application form or an amendment to the application within 30
  351  days after the change is effective.
  352         (4) An addition or subtraction of a control person or a
  353  change in the form of business organization. A control person
  354  added by a registrant is subject to this part and must submit
  355  fingerprints in accordance with s. 559.555 and the rules of the
  356  commission. The office may bring an administrative action in
  357  accordance with s. 559.730 to enforce this part if the added
  358  control person fails to meet registration requirements or comply
  359  with any other provision of this part.
  360         Section 7. Section 559.565, Florida Statutes, is amended to
  361  read:
  362         559.565 Enforcement action against out-of-state consumer
  363  debt collector.— The remedies of this section are cumulative to
  364  other sanctions and enforcement provisions of this part for any
  365  violation by an out-of-state consumer debt collector, as defined
  366  in s. 559.55(11) s. 559.55(8).
  367         (1) An out-of-state consumer debt collector who collects or
  368  attempts to collect consumer debts in this state without first
  369  registering in accordance with this part is subject to an
  370  administrative fine of up to $10,000 together with reasonable
  371  attorney fees and court costs in any successful action by the
  372  state to collect such fines.
  373         (2) A Any person, whether or not exempt from registration
  374  under this part, who violates s. 559.72 is subject to sanctions
  375  the same as any other consumer debt collector, including
  376  imposition of an administrative fine. The registration of a duly
  377  registered out-of-state consumer debt collector is subject to
  378  revocation or suspension in the same manner as the registration
  379  of any other registrant under this part.
  380         (3) In order to effectuate this section and enforce the
  381  requirements of this part as it relates to out-of-state consumer
  382  debt collectors, the Attorney General is expressly authorized to
  383  initiate such action on behalf of the state as he or she deems
  384  appropriate in any state or federal court of competent
  385  jurisdiction.
  386         Section 8. Section 559.730, Florida Statutes, is amended to
  387  read:
  388         559.730 Grounds for disciplinary action; administrative
  389  remedies.—
  390         (1) Each of the following acts constitutes a ground for
  391  which the disciplinary actions specified in subsection (2) may
  392  be taken against a person registered or required to be
  393  registered under this part:
  394         (a) Failure to disburse funds in accordance with
  395  agreements.
  396         (b) Fraud, misrepresentation, deceit, negligence, or
  397  incompetence in a collection transaction.
  398         (c) Commission of fraud, misrepresentation, concealment, or
  399  dishonest dealing by trick, scheme, or device; culpable
  400  negligence; breach of trust in a business transaction in any
  401  state, nation, or territory; or aiding, assisting, or conspiring
  402  with another person engaged in such misconduct and in
  403  furtherance thereof.
  404         (d) Being convicted of, or entering a plea of guilty or
  405  nolo contendere to, regardless of adjudication, a felony or
  406  crime involving fraud, dishonesty, breach of trust, money
  407  laundering, or act of moral turpitude.
  408         (e) Having a final judgment entered against the registrant
  409  in a civil action upon grounds of fraud, embezzlement,
  410  misrepresentation, or deceit.
  411         (f) Being the subject of a decision, finding, injunction,
  412  suspension, prohibition, revocation, denial, judgment, or
  413  administrative order by a court of competent jurisdiction or an
  414  administrative law judge, or by a state or federal agency,
  415  involving a violation of a federal or state law relating to debt
  416  collection or a rule or regulation adopted under such law.
  417         (g) Having a license or registration, or the equivalent, to
  418  practice a profession or occupation denied, suspended, or
  419  revoked, or otherwise acted against, including the denial of a
  420  registration or license by a registration or licensing authority
  421  of this state or another state, territory, or country.
  422         (h) Acting as a consumer collection agency without a
  423  current registration issued under this part.
  424         (i) A material misstatement or omission of fact on an
  425  initial or amended registration application.
  426         (j) Payment to the office for a registration or permit with
  427  a check or electronic transmission of funds, which is dishonored
  428  by the applicant’s or registrant’s financial institution.
  429         (k) Failure to comply with, or a violation of, any
  430  provision of this part, or any rule or order made or issued
  431  pursuant to this part.
  432         (l) Failure to maintain, preserve, and keep available for
  433  examination all books, accounts, or other documents required by
  434  this part and the rules of the commission.
  435         (m) Refusal to permit an investigation or examination of
  436  books and records, or refusal to comply with an office subpoena
  437  or subpoena duces tecum.
  438         (n) Failure to timely pay a fee, charge, or fine imposed or
  439  assessed pursuant to this part and the rules of the commission.
  440         (2) If the office finds a person in violation of any act
  441  specified in this section, it may enter an order imposing one or
  442  more of the following penalties:
  443         (a) Issuance of a reprimand.
  444         (b) Suspension of a registration, subject to reinstatement
  445  upon satisfying all reasonable conditions imposed by the office.
  446         (c) Revocation of a registration.
  447         (d) Denial of a registration.
  448         (e) Imposition of a fine of up to $10,000 for each count or
  449  separate offense.
  450         (f) An administrative fine of up to $1,000 per day for each
  451  day that a person engages as a consumer collection agency
  452  without a valid registration issued under this part.
  453         (1) The office may impose an administrative fine against,
  454  or revoke or suspend the registration of, a registrant under
  455  this part who has committed a violation of s. 559.72. Final
  456  action to fine, suspend, or revoke the registration of a
  457  registrant is subject to review in accordance with chapter 120.
  458         (3)(2) The office may impose suspension rather than
  459  revocation of a registration if circumstances warrant that one
  460  or the other should be imposed and the registrant demonstrates
  461  that the registrant has taken affirmative steps that can be
  462  expected to effectively eliminate the violations and that the
  463  registrant’s registration has never been previously suspended.
  464         (4) A consumer collection agency is subject to the
  465  disciplinary actions specified in subsection (2) for a violation
  466  of subsection (1) by a control person of the consumer collection
  467  agency.
  468         (5) Pursuant to s. 120.60(6), the office may summarily
  469  suspend the registration of a consumer collection agency if the
  470  office has reason to believe that a registrant poses an
  471  immediate, serious danger to the public’s health, safety, or
  472  welfare. The arrest of the registrant, or the consumer
  473  collection agency’s control person, for any felony or any crime
  474  involving fraud, dishonesty, breach of trust, money laundering,
  475  or any other act of moral turpitude is deemed sufficient to
  476  constitute an immediate danger to the public’s health, safety,
  477  or welfare. Any proceeding for the summary suspension of a
  478  registration must be conducted by the commissioner of the
  479  office, or designee, who shall issue the final summary order.
  480         (6) The office may deny a request to terminate a
  481  registration or withdraw a registration application if the
  482  office believes that an act that would be a ground for
  483  registration denial, suspension, restriction, or revocation
  484  under this part has been committed.
  485         (7)(3)In addition to, or in lieu of suspension or
  486  revocation of a registration, the office may impose an
  487  administrative fine of up to $10,000 per violation against a
  488  registrant for violations of s. 559.72. The Financial Services
  489  commission shall adopt rules establishing guidelines for
  490  imposing administrative penalties.
  491         (8)(4) This part does not preclude any person from pursuing
  492  remedies available under the Federal Fair Debt Collection
  493  Practices Act for any violation of such act.
  494         Section 9. This act shall take effect October 1, 2014.