Florida Senate - 2022                                     SB 546
       
       
        
       By Senator Gruters
       
       
       
       
       
       23-00431-22                                            2022546__
    1                        A bill to be entitled                      
    2         An act relating to consumer finance loans; amending s.
    3         516.03, F.S.; authorizing an applicant for a license
    4         to make and collect loans under the Florida Consumer
    5         Finance Act to provide certain documents in lieu of
    6         evidence of liquid assets; amending s. 516.031, F.S.;
    7         prohibiting a person licensed to make and collect
    8         consumer finance loans from charging prepayment
    9         penalties for loans; amending s. 516.05, F.S.;
   10         authorizing a licensee or an applicant for a license
   11         to make and collect consumer finance loans to provide
   12         a surety bond, certificate of deposit, or letter of
   13         credit in lieu of evidence of liquid assets; providing
   14         requirements for such bonds, certificates of deposit,
   15         and letters of credit; providing rulemaking authority
   16         to the Financial Services Commission; amending s.
   17         516.07, F.S.; modifying grounds for denial of license
   18         or disciplinary action for certain violations of the
   19         Florida Consumer Finance Act; amending s. 559.952,
   20         F.S.; revising exceptions for a licensee during the
   21         Financial Technology Sandbox period; providing an
   22         effective date.
   23          
   24  Be It Enacted by the Legislature of the State of Florida:
   25  
   26         Section 1. Subsection (1) of section 516.03, Florida
   27  Statutes, is amended to read:
   28         516.03 Application for license; fees; etc.—
   29         (1) APPLICATION.—Application for a license to make loans
   30  under this chapter shall be in the form prescribed by rule of
   31  the commission. The commission may require each applicant to
   32  provide any information reasonably necessary to determine the
   33  applicant’s eligibility for licensure. The applicant shall also
   34  provide information that the office requires concerning any
   35  officer, director, control person, member, partner, or joint
   36  venturer of the applicant or any person having the same or
   37  substantially similar status or performing substantially similar
   38  functions or concerning any individual who is the ultimate
   39  equitable owner of a 10-percent or greater interest in the
   40  applicant. The office may require information concerning any
   41  such applicant or person, including, but not limited to, his or
   42  her full name and any other names by which he or she may have
   43  been known, age, social security number, residential history,
   44  qualifications, educational and business history, and
   45  disciplinary and criminal history. The applicant must provide
   46  evidence of liquid assets of at least $25,000 or documents
   47  satisfying the requirements of s. 516.05(10). At the time of
   48  making such application the applicant shall pay to the office a
   49  nonrefundable biennial license fee of $625. Applications, except
   50  for applications to renew or reactivate a license, must also be
   51  accompanied by a nonrefundable investigation fee of $200. An
   52  application is considered received for purposes of s. 120.60
   53  upon receipt of a completed application form as prescribed by
   54  commission rule, a nonrefundable application fee of $625, and
   55  any other fee prescribed by law. The commission may adopt rules
   56  requiring electronic submission of any form, document, or fee
   57  required by this act if such rules reasonably accommodate
   58  technological or financial hardship. The commission may
   59  prescribe by rule requirements and procedures for obtaining an
   60  exemption due to a technological or financial hardship.
   61         Section 2. Subsection (6) is added to section 516.031,
   62  Florida Statutes, to read:
   63         516.031 Finance charge; maximum rates.—
   64         (6)PREPAYMENT PENALTIES PROHIBITED.—A licensee may not
   65  require a borrower to pay a prepayment penalty for paying all or
   66  part of the loan principal before the date on which the payment
   67  is due.
   68         Section 3. Subsection (10) is added to section 516.05,
   69  Florida Statutes, to read:
   70         516.05 License.—
   71         (10)(a) In lieu of the $25,000 liquid asset requirement in
   72  s. 516.03(1), a licensee or an applicant may provide to the
   73  office:
   74         1.a.A surety bond in the amount of at least $25,000,
   75  issued by a bonding company or an insurance company authorized
   76  to do business in this state.
   77         b.A company with at least one currently licensed location
   78  must provide to the office a rider or surety bond in the amount
   79  of at least $5,000 for each additional license, issued by a
   80  bonding company or an insurance company authorized to do
   81  business in this state. However, the aggregate amount of the
   82  surety bond required for a company with multiple licenses may
   83  not exceed $100,000.
   84         2.Evidence of a certificate of deposit in the amount of at
   85  least $25,000. The certificate of deposit must be deposited in a
   86  financial institution as defined in s. 655.005(1)(i).
   87         3.An irrevocable letter of credit in the amount of at
   88  least $25,000.
   89         (b)The original surety bond, certificate of deposit, or
   90  letter of credit must be filed with the office, and the office
   91  must be named as beneficiary. The surety bond, certificate of
   92  deposit, or letter of credit must be for the use and benefit of
   93  any borrower who is injured by acts of a licensee involving
   94  fraud, misrepresentation, or deceit, including willful
   95  imposition of illegal or excessive charges, or
   96  misrepresentation, circumvention, or concealment of any matter
   97  required to be stated or furnished to a borrower, where such
   98  acts are in connection with a loan made under this chapter. The
   99  office, or any claimant, may bring an action in a court of
  100  competent jurisdiction on the surety bond, certificate of
  101  deposit, or letter of credit. The surety bond, certificate of
  102  deposit, or letter of credit must be payable on a pro rata
  103  basis, but the aggregate amount may not exceed the amount of the
  104  surety bond, certificate of deposit, or letter of credit.
  105         (c)The surety bond, certificate of deposit, or letter of
  106  credit may not be canceled by the licensee, bonding or insurance
  107  company, or financial institution except upon notice to the
  108  office by certified mail. A cancellation may not take effect
  109  until 30 calendar days after receipt by the office of the
  110  written notice.
  111         (d)The bonding or insurance company or financial
  112  institution must, within 10 calendar days after it pays a claim,
  113  give written notice to the office by certified mail of such
  114  payment, with details sufficient to identify the claimant and
  115  the claim or judgment paid.
  116         (e)If the principal sum of the surety bond, certificate of
  117  deposit, or letter of credit is reduced by one or more
  118  recoveries or payments, the licensee must furnish to the office
  119  a new or additional surety bond, certificate of deposit, or
  120  letter of credit so that the total or aggregate principal sum
  121  equals the amount required under this subsection. Alternatively,
  122  a licensee may furnish an endorsement executed by the bonding or
  123  insurance company or financial institution reinstating the
  124  required principal amount.
  125         (f)The required surety bond, certificate of deposit, or
  126  letter of credit must remain in place for 2 years after the
  127  licensee ceases licensed operations in this state. During the 2
  128  year period, the office may allow for a reduction or elimination
  129  of the surety bond, certificate of deposit, or letter of credit
  130  to the extent the licensee’s outstanding consumer finance loans
  131  in this state are reduced.
  132         (g)The commission may prescribe by rule forms and
  133  procedures to implement this subsection.
  134         Section 4. Paragraph (b) of subsection (1) of section
  135  516.07, Florida Statutes, is amended to read:
  136         516.07 Grounds for denial of license or for disciplinary
  137  action.—
  138         (1) The following acts are violations of this chapter and
  139  constitute grounds for denial of an application for a license to
  140  make consumer finance loans and grounds for any of the
  141  disciplinary actions specified in subsection (2):
  142         (b) Failure to maintain liquid assets of at least $25,000
  143  or a surety bond, certificate of deposit, or letter of credit in
  144  the amount required by s. 516.05(10) at all times for the
  145  operation of business at a licensed location or proposed
  146  location.
  147         Section 5. Paragraph (a) of subsection (4) of section
  148  559.952, Florida Statutes, is amended to read:
  149         559.952 Financial Technology Sandbox.—
  150         (4) EXCEPTIONS TO GENERAL LAW AND WAIVERS OF RULE
  151  REQUIREMENTS.—
  152         (a) Notwithstanding any other law, upon approval of a
  153  Financial Technology Sandbox application, the following
  154  provisions and corresponding rule requirements are not
  155  applicable to the licensee during the sandbox period:
  156         1. Section 516.03(1), except for the application fee, the
  157  investigation fee, the requirement to provide the social
  158  security numbers of control persons, evidence of liquid assets
  159  of at least $25,000 or documents satisfying the requirements of
  160  s. 516.05(10), and the office’s authority to investigate the
  161  applicant’s background. The office may prorate the license
  162  renewal fee for an extension granted under subsection (7).
  163         2. Section 516.05(1) and (2), except that the office shall
  164  investigate the applicant’s background.
  165         3. Section 560.109, only to the extent that the section
  166  requires the office to examine a licensee at least once every 5
  167  years.
  168         4. Section 560.118(2).
  169         5. Section 560.125(1), only to the extent that the
  170  subsection would prohibit a licensee from engaging in the
  171  business of a money transmitter or payment instrument seller
  172  during the sandbox period.
  173         6. Section 560.125(2), only to the extent that the
  174  subsection would prohibit a licensee from appointing an
  175  authorized vendor during the sandbox period. Any authorized
  176  vendor of such a licensee during the sandbox period remains
  177  liable to the holder or remitter.
  178         7. Section 560.128.
  179         8. Section 560.141, except for s. 560.141(1)(a)1., 3., 7.
  180  10. and (b), (c), and (d).
  181         9. Section 560.142(1) and (2), except that the office may
  182  prorate, but may not entirely eliminate, the license renewal
  183  fees in s. 560.143 for an extension granted under subsection
  184  (7).
  185         10. Section 560.143(2), only to the extent necessary for
  186  proration of the renewal fee under subparagraph 9.
  187         11. Section 560.204(1), only to the extent that the
  188  subsection would prohibit a licensee from engaging in, or
  189  advertising that it engages in, the selling or issuing of
  190  payment instruments or in the activity of a money transmitter
  191  during the sandbox period.
  192         12. Section 560.205(2).
  193         13. Section 560.208(2).
  194         14. Section 560.209, only to the extent that the office may
  195  modify, but may not entirely eliminate, the net worth, corporate
  196  surety bond, and collateral deposit amounts required under that
  197  section. The modified amounts must be in such lower amounts that
  198  the office determines to be commensurate with the factors under
  199  paragraph (5)(c) and the maximum number of consumers authorized
  200  to receive the financial product or service under this section.
  201         Section 6. This act shall take effect October 1, 2022.