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.
30
31 Be It Enacted by the Legislature of the State of Florida:
32
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.