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.