Florida Senate - 2017 PROPOSED COMMITTEE SUBSTITUTE Bill No. CS for SB 872 Ì485526:Î485526 576-03836-17 Proposed Committee Substitute by the Committee on Appropriations (Appropriations Subcommittee on General Government) 1 A bill to be entitled 2 An act relating to consumer finance loans; creating s. 3 516.40, F.S.; establishing the Access to Responsible 4 Credit Pilot Program within the Office of Financial 5 Regulation; providing legislative findings and intent; 6 creating s. 516.41, F.S.; defining terms; creating s. 7 516.42, F.S.; prohibiting a person from certain 8 activities relating to program loans unless the person 9 obtains a pilot program license from the office; 10 providing criteria for participation in the pilot 11 program; specifying application requirements and fees; 12 providing for construction; specifying a renewal fee; 13 providing that only one pilot program license is 14 required for a person to make program loans; requiring 15 that branch offices of a program licensee be licensed; 16 specifying requirements and a fee for applications for 17 a program branch office license; requiring program 18 branch office licenses to be renewed biennially and 19 specifying a branch office renewal fee; creating s. 20 516.43, F.S.; providing requirements for and 21 limitations on program loans; requiring a program 22 licensee to provide specified disclosures; authorizing 23 licensees to provide certain documents in the language 24 in which the loan was negotiated; requiring a program 25 licensee to pay for certain translation costs incurred 26 by the office; authorizing a program licensee to 27 contract for and receive a specified nonrefundable 28 origination fee from a borrower on a program loan; 29 authorizing a program licensee to collect specified 30 insufficient funds fees and delinquency charges; 31 requiring a program licensee to provide specified 32 credit education to a borrower before disbursing 33 program loan proceeds; requiring a program licensee to 34 report borrowers’ payment performance to at least one 35 specified consumer reporting agency and provide 36 borrowers with the names of such agencies; prohibiting 37 the office from approving a person for the program 38 before the person is accepted as a data furnisher by a 39 consumer reporting agency; requiring a program 40 licensee to underwrite each program loan; prohibiting 41 a program licensee from making a program loan under 42 certain circumstances; providing required and 43 authorized procedures for a program licensee to 44 determine a borrower’s ability and willingness to 45 repay the program loan; prohibiting a program licensee 46 from requiring certain waivers from a borrower or from 47 certain acts against a borrower who refuses certain 48 waivers; providing for applicability and construction; 49 creating s. 516.44, F.S.; requiring arrangements 50 between a program licensee and a referral partner to 51 be specified in a written agreement; providing 52 requirements for such agreement; specifying authorized 53 services for referral partners; providing requirements 54 for a referral partner who accepts loan payments from 55 a borrower; providing for construction; prohibiting 56 specified activities by a referral partner; requiring 57 a referral partner to provide a specified notice to an 58 applicant for a program loan and certain assistance to 59 the applicant under certain circumstances; specifying 60 requirements, limitations, and prohibitions for the 61 compensation of a referral partner by a program 62 licensee; requiring a program licensee to provide a 63 specified notice to the office after entering into a 64 contract with a referral partner; requiring a referral 65 partner to provide written notice to the program 66 licensee of certain information within a specified 67 time; specifying the program licensee’s responsibility 68 for acts of its referral partner; requiring a program 69 licensee to pay a specified fee to the office to file 70 a referral partner notice; requiring rulemaking by the 71 Financial Services Commission; creating s. 516.45, 72 F.S.; requiring the office to examine program 73 licensees at specified intervals beginning on a 74 specified date; providing an exception; requiring 75 program licensees to pay the cost of examinations; 76 authorizing the office to maintain an action for 77 recovery of the cost; authorizing a method to 78 determine the cost of examinations; providing a 79 recordkeeping requirement for program licensees and 80 referral partners; providing that a program licensee 81 is subject to certain disciplinary action for certain 82 violations; authorizing the office to take certain 83 disciplinary actions; requiring rulemaking by the 84 commission; creating s. 516.46, F.S.; requiring a 85 program licensee to file a specified annual report 86 with the office beginning on a certain date; requiring 87 the office to post a report to its website summarizing 88 the use of the program by a certain date; specifying 89 information to be contained in the office’s report; 90 providing for conditional future repeal of the 91 program; providing an effective date. 92 93 Be It Enacted by the Legislature of the State of Florida: 94 95 Section 1. Section 516.40, Florida Statutes, is created to 96 read: 97 516.40 Access to Responsible Credit Pilot Program.— 98 (1) There is established within the Office of Financial 99 Regulation the Access to Responsible Credit Pilot Program. 100 (2) The Legislature finds that demand for responsible 101 consumer finance loans in principal amounts of at least $300 and 102 no more than $3,000 exceeds the supply of these loans. As a 103 first step toward addressing this gap, the Access to Responsible 104 Credit Pilot Program would allow more Floridians to obtain 105 responsible consumer finance loans of at least $300 and no more 106 than $3,000. The pilot program is also intended to assist 107 consumers in building their credit and has additional consumer 108 protections for these loans which exceed current protections 109 under general law. 110 Section 2. Section 516.41, Florida Statutes, is created to 111 read: 112 516.41 Definitions for ss. 516.40-516.46.—As used in ss. 113 516.40-516.46, the term: 114 (1) “Consumer reporting agency” has the same meaning as in 115 s. 603(p) of the Fair Credit Reporting Act, 15 U.S.C. s. 116 1681a(p). 117 (2) “Credit score” has the same meaning as in s. 118 609(f)(2)(A) of the Fair Credit Reporting Act, 15 U.S.C. s. 119 1681g(f)(2)(A). 120 (3) “Data furnisher” has the same meaning as the term 121 “furnisher” in 12 C.F.R. s. 1022.41(c). 122 (4) “Pilot program” or “program” means the Access to 123 Responsible Credit Pilot Program. 124 (5) “Pilot program license” means a license issued under 125 ss. 516.40-516.46 authorizing a program licensee to make and 126 collect program loans. 127 (6) “Program branch office” means a location, other than a 128 program licensee’s or referral partner’s principal place of 129 business: 130 (a) The address of which appears on business cards, 131 stationery, or advertising used by the program licensee in 132 connection with business conducted under this chapter; 133 (b) At which the program licensee’s name, advertising or 134 promotional materials, or signage suggests that program loans 135 are originated, negotiated, funded, or serviced; or 136 (c) At which program loans are originated, negotiated, 137 funded, or serviced by a program licensee. 138 (7) “Program branch office license” means a license issued 139 to a program licensee for each program branch office in the 140 state. 141 (8) “Program licensee” means a person who is licensed to 142 make and collect program loans under this chapter and who is 143 approved by the office to participate in the program. 144 (9) “Program loan” means a consumer finance loan with a 145 principal amount of at least $300 and no more than $3,000 146 originated pursuant to ss. 516.40–516.44, excluding the amount 147 of the origination fee authorized under s. 516.43(3). 148 (10) “Referral partner” means an entity that, at the 149 referral partner’s physical location for business or through 150 other means, performs one or more of the services authorized in 151 s. 516.44(2) on behalf of a program licensee. A referral partner 152 is not a credit service organization as defined in s. 817.7001 153 or a loan broker as defined in s. 687.14. 154 (11) “Refinance program loan” means a program loan that 155 extends additional principal to a borrower and replaces and 156 revises an existing program loan contract with the borrower. A 157 refinance program loan does not include an extension, a 158 deferral, or a rewrite of the program loan. 159 Section 3. Section 516.42, Florida Statutes, is created to 160 read: 161 516.42 Requirements for program participation; program 162 application requirements; fees.— 163 (1) A person may not advertise, offer, or make a program 164 loan or impose any charges or fees pursuant to s. 516.43 unless 165 the person first obtains a pilot program license from the 166 office. 167 (2)(a) In order to participate in the program, a person 168 must meet the following criteria: 169 1. Be licensed to make consumer finance loans under s. 170 516.05. 171 2. Not be the subject of any insolvency proceeding. 172 3. Not be subject to the issuance of a cease and desist 173 order; the issuance of a removal order; the denial, suspension, 174 or revocation of a license; or any other action within the 175 authority of the office or any other state, territory, or 176 jurisdiction. 177 4. Not have a deficiency at the time of the person’s 178 application. 179 5. Pay a nonrefundable application fee of $1,000 to the 180 office at the time of making the application, pursuant to rule 181 of the commission. 182 (b) A program applicant shall file with the office an 183 electronic application, in a form and manner prescribed by 184 commission rule, which contains all of the following information 185 with respect to the applicant: 186 1. The legal business name and any other name the applicant 187 operates under. 188 2. The applicant’s main address. 189 3. The telephone number and e-mail address of the 190 applicant. 191 4. The address of any program branch office. 192 5. The name, title, address, telephone number, and e-mail 193 address of the contact person for the applicant. 194 6. The applicant’s license number under this chapter. 195 7. A statement as to whether the applicant intends to use 196 the services of one or more referral partners under s. 516.44. 197 8. A statement that the applicant has been accepted as a 198 data furnisher by a consumer reporting agency and will report to 199 a consumer reporting agency the payment performance of each 200 borrower on all loans made under the program. 201 9. The signature and certification of a control person of 202 the applicant. 203 (3) Except as otherwise provided in ss. 516.40-516.46, a 204 program licensee is subject to all of the laws and rules 205 governing consumer finance loans under this chapter. 206 (4) A program licensee shall pay a nonrefundable biennial 207 renewal fee of $1,000 pursuant to commission rule. 208 (5) Notwithstanding s. 516.05(3), only one pilot program 209 license is required for a person to make program loans under ss. 210 516.40-516.46, regardless of whether the program licensee offers 211 program loans to prospective borrowers at its own physical 212 business locations, through referral partners, or through an 213 electronic access point through which a prospective borrower may 214 directly access the website of the program licensee. 215 (6) Each branch office of a program licensee must be 216 licensed under this section. 217 (7) The office shall issue a program branch office license 218 to a program licensee after the office determines that the 219 program licensee submitted a completed electronic application 220 for a program branch office license in a form prescribed by 221 commission rule and paid an initial nonrefundable program branch 222 office license fee of $30 per branch office as prescribed by 223 rule of the commission. Application fees may not be prorated for 224 partial years of licensure. The program branch office license 225 must be issued in the name of the program licensee that 226 maintains the branch office. An application is considered 227 received for purposes of s. 120.60 upon receipt of a completed 228 application form and the required fees. The application for a 229 program branch office license must contain the following 230 information: 231 (a) The legal business name and any other name the 232 applicant operates under. 233 (b) The applicant’s main address. 234 (c) The applicant’s telephone number and e-mail address. 235 (d) The address of each program branch office. 236 (e) The name, title, address, telephone number, and e-mail 237 address of the contact person for the applicant. 238 (f) The applicant’s license number under this chapter. 239 (g) The signature and certification of an authorized person 240 of the applicant. 241 (8) A program branch office license must be renewed 242 biennially at the time of renewing the program license under 243 subsection (4). A nonrefundable branch renewal fee of $30 per 244 program branch office, by commission rule, must be submitted at 245 the time of renewal. 246 Section 4. Section 516.43, Florida Statutes, is created to 247 read: 248 516.43 Requirements for program loans.— 249 (1) GENERAL REQUIREMENTS.—A program licensee shall comply 250 with each of the following requirements in making program loans: 251 (a) A program loan must be unsecured. 252 (b) A program loan must have a minimum term of 120 days, 253 but it may not impose a prepayment penalty. 254 (c) A program loan must be repayable by the borrower in 255 substantially equal weekly, biweekly, or monthly installments. 256 (d) A program loan must include a borrower’s right to 257 rescind the program loan by notifying the program licensee of 258 the borrower’s intent to rescind the program loan and return the 259 principal advanced by the end of the business day after the day 260 the program loan is consummated. 261 (e) Notwithstanding s. 516.031, the interest rate charged 262 on a program loan to the borrower may not exceed 36 percent. The 263 interest rate must be fixed for the life of the program loan and 264 must accrue on a simple-interest basis through the application 265 of a daily periodic rate to the actual unpaid principal balance 266 each day. 267 (f) The program licensee shall reduce the rate on each 268 subsequent program loan to the same borrower by a minimum of 269 one-twelfth of 1 percent per month, if all of the following 270 conditions are met: 271 1. The subsequent program loan is originated no more than 272 180 days after the prior program loan is fully repaid. 273 2. The borrower was never more than 15 days delinquent on 274 the prior program loan. 275 3. The prior program loan was outstanding for at least one 276 half of its original term before its repayment. 277 (g) A program licensee may not refinance a program loan 278 unless all of the following conditions are met at the time the 279 borrower submits an application to refinance: 280 1. The principal amount payable does not include more than 281 60 days of unpaid interest accrued on the previous program loan 282 in accordance with s. 516.031(5); 283 2. The borrower has repaid at least 60 percent of the 284 outstanding principal remaining on his or her existing program 285 loan; 286 3. The borrower is current on his or her outstanding 287 program loan; 288 4. The program licensee has underwritten the new program 289 loan in accordance with subsection (7); and 290 5. The borrower has not previously refinanced the 291 outstanding program loan. 292 (h) In lieu of the provisions of s. 687.08, a program 293 licensee or, if applicable, its approved referral partner shall 294 make available to the borrower by either electronic or physical 295 means a plain and complete receipt of payment at the time that a 296 payment is made by the borrower. For audit purposes, a program 297 licensee shall maintain an electronic record for each receipt 298 made available to a borrower, which must include a copy of the 299 receipt and the date and time that the receipt was generated. 300 Each receipt of payment must show all of the following: 301 1. The name of the borrower. 302 2. The name of the referral partner, if applicable. 303 3. The total payment amount received. 304 4. The date of payment. 305 5. The program loan balance before and after application of 306 the payment. 307 6. The amount of the payment that was applied to the 308 principal, interest, and fees. 309 7. The type of payment made by the borrower. 310 8. The following statement, prominently displayed in a type 311 size equal to or greater than the type size used to display the 312 other items on the receipt: “If you have any questions about 313 your loan now or in the future, you should direct those 314 questions to ...(name of program licensee)... by ...(at least 315 two different ways in which a borrower may contact the program 316 licensee)....” 317 (2) WRITTEN DISCLOSURES.— 318 (a) A program licensee shall provide those disclosures 319 required of all licensees in s. 516.15. 320 (b) Notwithstanding s. 516.15(1), the loan contract and all 321 written disclosures and statements may be provided in English or 322 in the language in which the loan is negotiated. A program 323 licensee shall pay for any translation costs incurred by the 324 office. 325 (3) ORIGINATION FEES.— 326 (a) Notwithstanding s. 516.031, a program licensee may 327 contract for and receive a nonrefundable origination fee from a 328 borrower on a program loan. The program licensee may either 329 deduct the origination fee from the principal amount of the loan 330 disbursed to the borrower or capitalize the origination fee into 331 the principal balance of the loan. The origination fee is fully 332 earned and nonrefundable immediately upon the making of the 333 program loan and may not exceed 6 percent of the principal 334 amount of the program loan made to the borrower, exclusive of 335 the lesser of the origination fee or $75. 336 (b) A program licensee may not charge a borrower an 337 origination fee more than once in any 12-month period. 338 (4) INSUFFICIENT FUNDS FEES AND DELINQUENCY CHARGES. 339 Notwithstanding s. 516.031, a program licensee approved by the 340 office to participate in the program may: 341 (a) Require payment from a borrower of no more than $20 for 342 fees incurred by the program licensee from a dishonored payment 343 due to insufficient funds of the borrower. 344 (b) Notwithstanding s. 516.031(3)(a)9., contract for and 345 receive a delinquency charge of no more than $15 for each 346 payment in default for at least 10 days, if the charge is agreed 347 upon in writing between the parties before imposing the charge. 348 A delinquency fee imposed by a program licensee is subject to 349 all of the following restrictions: 350 1. No more than one delinquency fee may be imposed per 351 delinquent payment. 352 2. No more than two delinquency fees may be imposed during 353 a period of 30 consecutive days. 354 355 The program licensee, or any wholly owned subsidiary of the 356 program licensee, may not sell or assign an unpaid debt to an 357 independent third party for collection purposes unless the debt 358 has been delinquent for at least 30 days. 359 (5) CREDIT EDUCATION.—Before disbursement of program loan 360 proceeds to the borrower, the program licensee must: 361 (a) Direct the borrower to the consumer credit counseling 362 services offered by an independent third party; or 363 (b) Provide a credit education program or materials to the 364 borrower. A borrower is not required to participate in any of 365 these education programs or seminars. A credit education program 366 or seminar offered pursuant to this subsection must be provided 367 at no cost to the borrower. 368 (6) CREDIT REPORTING.— 369 (a) The program licensee shall report each borrower’s 370 payment performance to at least one consumer reporting agency 371 that compiles and maintains files on consumers on a nationwide 372 basis. As used in this section, the term “consumer reporting 373 agency that compiles and maintains files on consumers on a 374 nationwide basis” has the same meaning as in s. 603(p) of the 375 Fair Credit Reporting Act, 15 U.S.C. s. 1681a(p). 376 (b) The office may not approve a person for the program 377 before the person has been accepted as a data furnisher by a 378 consumer reporting agency. 379 (c) The program licensee shall provide each borrower with 380 the name or names of the consumer reporting agency or agencies 381 to which it will report the borrower’s payment history. 382 (7) PROGRAM LOAN UNDERWRITING.— 383 (a) The program licensee shall underwrite each program loan 384 to determine a borrower’s ability and willingness to repay the 385 program loan pursuant to the program loan terms. The program 386 licensee may not make a program loan if it determines that the 387 borrower’s total monthly debt service payments at the time of 388 origination, including the program loan for which the borrower 389 is being considered and all outstanding forms of credit that can 390 be independently verified by the program licensee, exceed 35 391 percent of the borrower’s gross monthly income. 392 (b)1. The program licensee shall seek information and 393 documentation pertaining to all of a borrower’s outstanding debt 394 obligations during the loan application and underwriting 395 process, including loans that are self-reported by the borrower 396 but not available through independent verification. The program 397 licensee shall verify such information using a credit report 398 from at least one consumer reporting agency that compiles and 399 maintains files on consumers on a nationwide basis or through 400 other available electronic debt verification services that 401 provide reliable evidence of a borrower’s outstanding debt 402 obligations. 403 2. The program licensee is not required to consider loans 404 made to a borrower by friends or family in determining the 405 borrower’s debt-to-income ratio. 406 (c) The program licensee shall also verify the borrower’s 407 income in determining the debt-to-income ratio using information 408 from: 409 1. Electronic means or services that provide reliable 410 evidence of the borrower’s actual income; or 411 2. Internal Revenue Service Form W-2, tax returns, payroll 412 receipts, bank statements, or other third-party documents that 413 provide reasonably reliable evidence of the borrower’s actual 414 income. 415 (8) PROVISIONS ON WAIVERS.— 416 (a) A program licensee may not require, as a condition of 417 providing the program loan, that the borrower: 418 1. Waive any right, penalty, remedy, forum, or procedure 419 provided for in any law applicable to the program loan, 420 including the right to file and pursue a civil action or file a 421 complaint with or otherwise communicate with the office, any 422 court, or other governmental entity. 423 2. Agree to the application of laws other than those of 424 this state. 425 3. Agree to resolve disputes in a jurisdiction outside of 426 this state. 427 (b) A waiver that is required as a condition of doing 428 business with the program licensee is presumed involuntary, 429 unconscionable, against public policy, and unenforceable. 430 (c) A program licensee may not refuse to do business with 431 or discriminate against a borrower or an applicant on the basis 432 of the borrower’s or applicant’s refusal to waive any right, 433 penalty, remedy, forum, or procedure, including the right to 434 file and pursue a civil action or complaint with, or otherwise 435 notify, the office, a court, or any other governmental entity. 436 The exercise of a person’s right to refuse to waive any right, 437 penalty, remedy, forum, or procedure, including a rejection of a 438 contract requiring a waiver, does not affect any otherwise legal 439 terms of a contract or an agreement. 440 (d) This subsection does not apply to any agreement to 441 waive any right, penalty, remedy, forum, or procedure, including 442 any agreement to arbitrate a claim or dispute, after a claim or 443 dispute has arisen. This subsection does not affect the 444 enforceability or validity of any other provision of the 445 contract. 446 Section 5. Section 516.44, Florida Statutes, is created to 447 read: 448 516.44 Referral partners.— 449 (1) REFERRAL PARTNER AGREEMENT.—All arrangements between a 450 program licensee and a referral partner must be specified in a 451 written referral partner agreement between the parties. The 452 agreement must contain a provision that the referral partner 453 agrees to comply with this section and all rules adopted under 454 this section regarding the activities of referral partners, and 455 that the office has access to the referral partner’s books and 456 records pertaining to the referral partner’s operations under 457 the agreement with the program licensee in accordance with s. 458 516.45(4). 459 (2) AUTHORIZED SERVICES.—A program licensee may use the 460 services of one or more referral partners as provided in this 461 section. A referral partner may perform one or more of the 462 following services for a program licensee: 463 (a) Distributing, circulating, using, or publishing printed 464 brochures, flyers, fact sheets, or other written materials 465 relating to program loans that the program licensee may make or 466 negotiate. The written materials must be reviewed and approved 467 in writing by the program licensee before being distributed, 468 circulated, used, or published. 469 (b) Providing written factual information about program 470 loan terms, conditions, or qualification requirements to a 471 prospective borrower which has been prepared by the program 472 licensee or reviewed and approved in writing by the program 473 licensee. A referral partner may discuss the information with a 474 prospective borrower in general terms. 475 (c) Notifying a prospective borrower of the information 476 needed in order to complete a program loan application. 477 (d) Entering information provided by the prospective 478 borrower on a preprinted or an electronic application form or in 479 a preformatted computer database. 480 (e) Assembling credit applications and other materials 481 obtained in the course of a credit application transaction for 482 submission to the program licensee. 483 (f) Contacting the program licensee to determine the status 484 of a program loan application. 485 (g) Communicating a response that is returned by the 486 program licensee’s automated underwriting system to a borrower 487 or a prospective borrower. 488 (h) Obtaining a borrower’s signature on documents prepared 489 by the program licensee and delivering final copies of the 490 documents to the borrower. 491 (i) Disbursing program loan proceeds to a borrower if this 492 method of disbursement is acceptable to the borrower, subject to 493 the requirements of subsection (3). A loan disbursement made by 494 a referral partner under this paragraph is deemed to be made by 495 the program licensee on the date that the funds are disbursed or 496 otherwise made available by the referral partner to the 497 borrower. 498 (j) Receiving a program loan payment from the borrower if 499 this method of payment is acceptable to the borrower, subject to 500 the requirements of subsection (3). 501 (k) Operating an electronic access point through which a 502 prospective borrower may directly access the website of the 503 program licensee to apply for a program loan. 504 (3) RECEIPT OR DISBURSEMENT OF PROGRAM LOAN PAYMENTS.— 505 (a) A loan payment made by a borrower to a referral partner 506 under paragraph (2)(j) must be applied to the borrower’s program 507 loan and is deemed received by the program licensee as of the 508 date the payment is received by the referral partner. 509 (b) A referral partner that receives loan payments must 510 deliver or cause to be delivered to the borrower a plain and 511 complete receipt showing all of the information specified in s. 512 516.43(1)(h) at the time that the payment is made by the 513 borrower. 514 (c) A borrower who submits a loan payment to a referral 515 partner under this subsection is not liable for a failure or 516 delay by the referral partner in transmitting the payment to the 517 program licensee. 518 (d) A referral partner that disburses or receives loan 519 payments pursuant to paragraph (2)(i) or paragraph (2)(j) must 520 maintain records of all disbursements made and loan payments 521 received for a period of at least 2 years. 522 (4) PROHIBITED ACTIVITIES.—A referral partner may not 523 engage in any of the following activities: 524 (a) Providing counseling or advice to a borrower or 525 prospective borrower with respect to any loan term. 526 (b) Providing loan-related marketing material that has not 527 previously been approved by the program licensee to a borrower 528 or a prospective borrower. 529 (c) Negotiating a loan term between a program licensee and 530 a prospective borrower. 531 (d) Offering information pertaining to a single prospective 532 borrower to more than one program licensee. However, if a 533 program licensee has declined to offer a program loan to a 534 prospective borrower and has so notified the prospective 535 borrower in writing, the referral partner may then offer 536 information pertaining to that borrower to another program 537 licensee with whom it has a referral partner agreement. 538 (e) Requiring a borrower to pay any fees or charges to the 539 referral partner or to any other person in connection with a 540 program loan other than those permitted under ss. 516.40-516.46. 541 (5) DISCLOSURE NOTICE AND COMMUNICATION.— 542 (a) At the time the referral partner receives or processes 543 an application for a program loan, the referral partner shall 544 provide the following statement to the applicant on behalf of 545 the program licensee, in no smaller than 10-point type, and 546 shall request that the applicant acknowledge receipt of the 547 statement in writing: 548 549 Your loan application has been referred to us by 550 ...(name of referral partner).... We may pay a fee to 551 ...(name of referral partner)... for the successful 552 referral of your loan application. If you are approved 553 for the loan, ...(name of program licensee)... will 554 become your lender. If you have any questions about 555 your loan, now or in the future, you should direct 556 those questions to ...(name of program licensee)... by 557 ...(insert at least two different ways in which a 558 borrower may contact the program licensee).... If you 559 wish to report a complaint about ...(name of referral 560 partner)... or ...(name of program licensee)... 561 regarding this loan transaction, you may contact the 562 Division of Consumer Finance of the Office of 563 Financial Regulation at 850-487-9687 or 564 http://www.flofr.com. 565 566 (b) If the loan applicant has questions about the program 567 loan which the referral partner is not permitted to answer, the 568 referral partner must make a good faith effort to assist the 569 applicant in making direct contact with the program licensee 570 before the program loan is consummated. 571 (6) COMPENSATION.— 572 (a) The program licensee may compensate a referral partner 573 in accordance with a written agreement and a compensation 574 schedule that is mutually agreed to by the program licensee and 575 the referral partner, subject to the requirements in paragraph 576 (b). 577 (b) The compensation of a referral partner by a program 578 licensee is subject to all of the following requirements: 579 1. Compensation may not be paid to a referral partner in 580 connection with a loan application unless the program loan is 581 consummated. 582 2. Compensation may not be paid to a referral partner based 583 upon the principal amount of the program loan. 584 3. Compensation may not be directly or indirectly passed on 585 to a borrower through a fee or other compensation, or a portion 586 of a fee or other compensation, charged to a borrower. 587 4. Subject to the limitations specified in subparagraphs 588 1., 2., and 3., the total compensation paid by a program 589 licensee to a referral partner for the services specified in 590 subsection (2) may not exceed the sum of: 591 a. Sixty dollars per program loan, on average, assessed 592 annually, whether paid at the time of consummation, through 593 installments, or in a manner otherwise agreed upon by the 594 program licensee and the referral partner; and 595 b. Two dollars per payment received by the referral partner 596 on behalf of the program licensee for the duration of the 597 program loan, if the referral partner receives borrower loan 598 payments on the program licensee’s behalf in accordance with 599 subsection (3). 600 5. The referral partner’s location for services and other 601 information required by subsection (7) must be reported to the 602 office. 603 (c) A program licensee or a referral partner may not pass 604 on to a borrower, whether directly or indirectly, any additional 605 cost or other charge for compensation paid to a referral partner 606 under this program. 607 (7) NOTICE TO OFFICE.—A program licensee that uses the 608 service of a referral partner must notify the office, in a form 609 and manner prescribed by the commission, within 15 days after 610 entering into a contract with a referral partner regarding all 611 of the following: 612 (a) The name, business address, and licensing details of 613 the referral partner and all locations at which the referral 614 partner will perform services under this section. 615 (b) The name and contact information for an employee of the 616 referral partner who is knowledgeable about, and has the 617 authority to execute, the referral partner agreement. 618 (c) The name and contact information of one or more 619 employees of the referral partner who are responsible for that 620 referral partner’s referring activities on behalf of the program 621 licensee. 622 (d) A statement by the program licensee that it has 623 conducted due diligence with respect to the referral partner and 624 has confirmed that none of the following applies: 625 1. The filing of a petition under the United States 626 Bankruptcy Code for bankruptcy or reorganization by the referral 627 partner. 628 2. The commencement of an administrative or judicial 629 license suspension or revocation proceeding, or the denial of a 630 license request or renewal, by any state, the District of 631 Columbia, any United States territory, or any foreign country in 632 which the referral partner operates, plans to operate, or is 633 licensed to operate. 634 3. A felony indictment involving the referral partner or an 635 affiliated party. 636 4. A felony conviction, guilty plea, or plea of nolo 637 contendere, regardless of adjudication, of the referral partner 638 or an affiliated party. 639 5. Any suspected criminal act perpetrated in this state 640 relating to activities regulated under this chapter by a 641 referral partner. 642 6. Notification by a law enforcement or prosecutorial 643 agency that the referral partner is under criminal investigation 644 which includes, but is not limited to, subpoenas to produce 645 records or testimony and warrants issued by a court of competent 646 jurisdiction which authorize the search and seizure of any 647 records relating to a business activity regulated under this 648 chapter. 649 650 As used in this paragraph, the term “affiliated party” means a 651 director, an officer, a responsible person, an employee, or a 652 foreign affiliate of a referral partner; or a person who has a 653 controlling interest in a referral partner. 654 (e) Any other information requested by the office subject 655 to the limitations specified in s. 516.45(4). 656 (8) NOTICE OF CHANGES.—A referral partner must provide the 657 program licensee with written notice, sent by registered mail, 658 within 30 days after any changes are made to the information 659 specified in paragraphs (7)(a)-(c) or within 30 days after the 660 occurrence or knowledge of any of the events specified in 661 paragraph (7)(d), whichever is later. 662 (9) RESPONSIBILITY FOR ACTS OF A REFERRAL PARTNER.—A 663 program licensee is responsible for any act of its referral 664 partner if the program licensee should have known of the act or 665 if the program licensee had actual knowledge that the act is a 666 violation of this chapter and allowed it to continue. Such 667 responsibility is limited to conduct engaged in by the referral 668 partner pursuant to the authority granted to it by the program 669 licensee under the contract between the referral partner and the 670 program licensee. 671 (10) REFERRAL PARTNER FEE.—The program licensee shall pay 672 to the office at the time it files a referral partner notice 673 with the office a one-time, nonrefundable fee of $30 for each 674 referral partner, as prescribed by commission rule. 675 Section 6. Section 516.45, Florida Statutes, is created to 676 read: 677 516.45 Examinations; disciplinary actions.— 678 (1) Notwithstanding any other law, commencing on January 1, 679 2019, the office shall examine each program licensee that is 680 accepted into the program in accordance with this chapter at 681 least once every 24 months. 682 (2) Notwithstanding subsection (1), the office may waive 683 one or more branch office examinations if the office finds that 684 such examinations are not necessary for the protection of the 685 public due to the centralized operations of the program licensee 686 or other factors acceptable to the office. 687 (3) The examined program licensee shall pay for the cost of 688 an examination to the office, pursuant to commission rule, and 689 the office may maintain an action for the recovery of the cost 690 in any court of competent jurisdiction. In determining the cost 691 of the examination, the office may use the estimated average 692 hourly cost for all persons performing examinations of program 693 licensees or other persons subject to ss. 516.40-516.46 for the 694 fiscal year. 695 (4) A program licensee or referral partner shall maintain, 696 preserve, and keep available for examination all books, 697 accounts, or other documents required by this chapter, any rule 698 or order adopted under this chapter, or any agreement entered 699 into with the office. 700 (5) A program licensee who violates any applicable 701 provision of this chapter is subject to disciplinary action 702 pursuant to s. 516.07(2). Any such disciplinary action is 703 subject to s. 120.60. A program licensee is also subject to 704 disciplinary action for a violation of s. 516.44 committed by 705 any of its referral partners. 706 (6) The office may take any of the following actions 707 against a referral partner who violates s. 516.44: 708 (a) Disqualify the referral partner from performing 709 services under this chapter; 710 (b) Bar the referral partner from performing services at 711 one or more specific locations of the referral partner; 712 (c) Terminate a written agreement between a referral 713 partner and a program licensee; 714 (d) Impose an administrative fine not to exceed $1,000 for 715 each such act of the referral partner; and 716 (e) Prohibit program licensees from using the referral 717 partner, if the office deems it to be in the public interest. 718 Section 7. Section 516.46, Florida Statutes, is created to 719 read: 720 516.46 Annual reports; reports by the office.— 721 (1) Beginning in 2019, on or before March 15 of each year, 722 a program licensee shall file a report with the office on each 723 of the items specified in subsection (2), on a form and in a 724 manner as prescribed by commission rule, which contains 725 aggregated or anonymized data without reference to any 726 borrower’s nonpublic personal information or any proprietary or 727 trade secret information of the program licensee. 728 (2) On or before January 1, 2020, the office shall post a 729 report on its website summarizing the use of the program based 730 on the information contained in reports filed by each program 731 licensee under subsection (1). The report must state the 732 information in the aggregate so as not to identify data by 733 specific program licensee and must specify the period to which 734 the report corresponds. The report must include, but not be 735 limited to, the following for that period: 736 (a) The number of entities that applied to participate in 737 the program. 738 (b) The number of entities accepted to participate in the 739 program. 740 (c) The office’s reasons for rejecting applications for 741 participation, if applicable. This information must be provided 742 in a manner that does not identify the entity or entities 743 rejected. 744 (d) The number of program loan applications received by 745 program licensees participating in the program, the number of 746 program loans made under the program, the total amount loaned, 747 the distribution of loan lengths upon origination, and the 748 distribution of interest rates and principal amounts upon 749 origination among those program loans. 750 (e) The number of borrowers who obtained more than one 751 program loan and the distribution of the number of program loans 752 per borrower. 753 (f) Of the borrowers who obtained more than one program 754 loan, the percentage of those borrowers whose credit scores 755 increased between successive loans, based on information from at 756 least one major credit bureau, and the average size of the 757 increase. 758 (g) The income distribution of borrowers upon program loan 759 origination, including the number of borrowers who obtained at 760 least one program loan and who resided in a low-income or 761 moderate-income census tract at the time of their loan 762 applications. 763 (h) The number of borrowers who obtained program loans for 764 the following purposes, based on borrower responses at the time 765 of their loan applications indicating the primary purpose for 766 which the program loan was obtained: 767 1. Pay medical expenses. 768 2. Pay for vehicle repair or a vehicle purchase. 769 3. Pay bills. 770 4. Consolidate debt. 771 5. Build or repair credit history. 772 6. Pay other expenses. 773 (i) The number of borrowers who self-report that they had a 774 bank account at the time of their loan application and the 775 number of borrowers who self-report that they did not have a 776 bank account at the time of their loan application. 777 (j) With respect to refinance program loans, the report 778 must specifically include the following information: 779 1. The number and percentage of borrowers who applied for a 780 refinance program loan. 781 2. Of those borrowers who applied for a refinance program 782 loan, the number and percentage of borrowers who obtained a 783 refinance program loan. 784 (k) The number and type of referral partners used by 785 program licensees. 786 (l) The number and percentage of borrowers who obtained one 787 or more program loans on which delinquency charges were 788 assessed, the total amount of delinquency charges assessed, and 789 the average delinquency charge assessed by dollar amount and as 790 a percentage of the principal amount loaned. 791 (m) The performance of program loans under the program as 792 reflected by all of the following: 793 1. The number and percentage of borrowers who experienced 794 at least one delinquency lasting between 7 and 29 days, and the 795 distribution of principal loan amounts corresponding to those 796 delinquencies. 797 2. The number and percentage of borrowers who experienced 798 at least one delinquency lasting between 30 and 59 days, and the 799 distribution of principal loan amounts corresponding to those 800 delinquencies. 801 3. The number and percentage of borrowers who experienced 802 at least one delinquency lasting 60 days or more, and the 803 distribution of principal loan amounts corresponding to those 804 delinquencies. 805 (n) The number and types of violations of ss. 516.40-516.46 806 by referral partners which were documented by the office. 807 (o) The number and types of violations of ss. 516.40-516.46 808 by program licensees which were documented by the office. 809 (p) The number of times that the office disqualified a 810 referral partner from performing services, barred a referral 811 partner from performing services at one or more specific 812 locations of the referral partner, terminated a written 813 agreement between a referral partner and a program licensee, or 814 imposed an administrative penalty. 815 (q) The number of complaints received by the office about a 816 program licensee or a referral partner and the nature of those 817 complaints. 818 Section 8. Sections 516.40-516.46, Florida Statutes, are 819 repealed on December 31, 2022, unless reenacted or superseded by 820 another law enacted by the Legislature before that date. 821 Section 9. This act shall take effect July 1, 2018.