Florida Senate - 2023                        COMMITTEE AMENDMENT
       Bill No. SB 1624
       
       
       
       
       
       
                                Ì180480ÉÎ180480                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  03/30/2023           .                                
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       The Committee on Banking and Insurance (Brodeur) recommended the
       following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Part XIII of chapter 559, Florida Statutes,
    6  consisting of sections 559.961, 559.9611, 559.9612, 559.9613,
    7  559.9614, and 559.9615, Florida Statutes, is created to read:
    8                              PART XIII                            
    9             FLORIDA COMMERCIAL FINANCING DISCLOSURE LAW           
   10         559.961Short title.—This part may be cited as the “Florida
   11  Commercial Financing Disclosure Law.”
   12         559.9611Definitions.—As used in this part, the term:
   13         (1)“Accounts receivable purchase transaction” means a
   14  transaction in which a business forwards or otherwise sells to a
   15  person all or a portion of the business’s accounts or payment
   16  intangibles as those terms are defined in s. 679.1021 at a
   17  discount to the expected value of the account or payment
   18  intangibles. For purposes of this part, the provider’s
   19  characterization of an accounts receivable purchase transaction
   20  as a purchase is conclusive that the accounts receivable
   21  purchase transaction is not a loan or a transaction for the use,
   22  forbearance, or detention of money.
   23         (2)“Advance fee” means any consideration that is assessed
   24  or collected by a broker before the closing of a commercial
   25  financing transaction.
   26         (3)“Broker” means a person who, for compensation or the
   27  expectation of compensation, arranges a commercial financing
   28  transaction or an offer between a third party and a business in
   29  this state which would, if executed, be binding upon that third
   30  party. The term excludes a provider and any individual or entity
   31  whose compensation is not based or dependent upon the terms of
   32  the specific commercial financing transaction obtained or
   33  offered.
   34         (4)“Business” means an individual or a group of
   35  individuals, a sole proprietorship, a corporation, a limited
   36  liability company, a trust, an estate, a cooperative, an
   37  association, or a limited or general partnership engaged in a
   38  business activity.
   39         (5)“Commercial financing transaction” means a commercial
   40  loan, an accounts receivable purchase transaction, or a
   41  commercial open-end credit plan to the extent the transaction is
   42  also a business purpose transaction. As used in this subsection,
   43  the term “business purpose transaction” means a transaction the
   44  proceeds of which are provided to a business or are intended to
   45  be used to carry on a business and not to be used for personal,
   46  family, or household purposes. For purposes of determining
   47  whether a transaction is a business purpose transaction, the
   48  provider may rely on any written statement of intended purpose
   49  signed by the business. The statement may be a separate
   50  statement or may be contained in an application, agreement, or
   51  other document signed by the business or the business owner.
   52         (6)“Commercial loan” means a loan to a business, whether
   53  secured or unsecured.
   54         (7)“Commercial open-end credit plan” means commercial
   55  financing extended by any provider under a plan in which:
   56         (a)The provider reasonably contemplates repeat
   57  transactions.
   58         (b)The amount of financing that may be extended to the
   59  business during the term of the plan, up to any limit set by the
   60  provider, is generally made available to the extent that any
   61  outstanding balance is repaid.
   62         (8)“Depository institution” means:
   63         (a)A bank, a trust company, or an industrial loan company
   64  doing business under the authority of, or in accordance with, a
   65  license, certificate, or charter issued by the United States,
   66  this state, or any other state, district, territory, or
   67  commonwealth of the United States which is authorized to
   68  transact business in this state;
   69         (b)A federally chartered savings and loan association,
   70  federal savings bank, or federal credit union that is authorized
   71  to transact business in this state; or
   72         (c)A savings and loan association, savings bank, or credit
   73  union organized under the laws of this or any other state which
   74  is authorized to transact business in this state.
   75         (9)“Provider” means a person who consummates more than
   76  five commercial financing transactions with a business located
   77  in this state in any calendar year. The term also includes a
   78  person who enters into a written agreement with a depository
   79  institution to arrange a commercial financing transaction
   80  between the depository institution and a business via an online
   81  lending platform administered by the person. The fact that a
   82  provider extends a specific offer for a commercial financing
   83  transaction on behalf of a depository institution may not be
   84  construed to mean that the provider engaged in lending or
   85  financing or originated that loan or financing.
   86         559.9612Scope of this part.—This part applies to any
   87  commercial financing transaction consummated on or after January
   88  1, 2024. This part does not apply to:
   89         (1)A provider that is:
   90         (a)A federally insured depository institution or an
   91  affiliate or holding company of such institution; or
   92         (b)A subsidiary or service corporation that is owned and
   93  controlled by a federally insured depository institution.
   94         (2)A provider that is a lender regulated under the Farm
   95  Credit Act of 1971, 12 U.S.C. ss. 2001 et seq.
   96         (3)A commercial financing transaction that is:
   97         (a)Secured by real property;
   98         (b)A lease; or
   99         (c)A purchase money obligation that is incurred as all or
  100  part of the price of the collateral or for value given to enable
  101  the business to acquire rights in or the use of the collateral
  102  if the value is in fact so used.
  103         (4)A commercial financing transaction in which the
  104  recipient is a motor vehicle dealer or an affiliate of such a
  105  dealer, or a vehicle rental company or an affiliate of such a
  106  company, pursuant to a commercial loan or commercial open-end
  107  credit plan of at least $50,000 or a commercial financing
  108  transaction offered by a person in connection with the sale or
  109  lease of products or services that such person manufactures,
  110  licenses, or distributes, or whose parent company or any of its
  111  directly or indirectly owned and controlled subsidiaries
  112  manufactures, licenses, or distributes.
  113         (5)A provider that is licensed as a money transmitter in
  114  accordance with a license, certificate, or charter issued by
  115  this state or any other state, district, territory, or
  116  commonwealth of the United States.
  117         (6)A provider that consummates no more than five
  118  commercial financing transactions in this state in a 12-month
  119  period.
  120         (7)A commercial financing transaction of more than
  121  $500,000.
  122         559.9613Disclosures.—
  123         (1)A provider that consummates a commercial financing
  124  transaction shall provide a written disclosure of the terms of
  125  the commercial financing transaction as required by this part.
  126  The disclosures must be provided at or before consummation of
  127  the transaction. Only one disclosure must be provided for each
  128  commercial financing transaction, and a disclosure is not
  129  required as result of a modification, forbearance, or change to
  130  a consummated commercial financing transaction.
  131         (2)A provider shall provide a written disclosure of the
  132  following information in connection with each commercial
  133  financing transaction:
  134         (a)The total amount of funds provided to the business
  135  under the terms of the agreement.
  136         (b)The total amount of funds disbursed to the business if
  137  less than the amount specified in paragraph (a) as a result of
  138  any fees deducted or withheld at disbursement, any amount paid
  139  to the provider to satisfy a prior balance, and any amount paid
  140  to a third party on behalf of the business.
  141         (c)The total amount to be paid to the provider under the
  142  terms of the agreement.
  143         (d)The total dollar cost under the terms of the agreement,
  144  calculated by finding the difference between the amount
  145  specified in paragraph (a) and the amount specified in paragraph
  146  (c).
  147         (e)1.The manner, frequency, and amount of each payment; or
  148         2.If the amount of the payments may vary, the provider
  149  must instead disclose the manner and frequency of the payments,
  150  the estimated amount of the initial payment, a description of
  151  the methodology for calculating any variable payment, and the
  152  circumstances under which payments may vary.
  153         (f)Whether there are any costs or discounts associated
  154  with prepayment, including a reference to the provision in the
  155  agreement which creates the contractual rights of the parties
  156  related to prepayment.
  157         559.9614Prohibited acts.—A broker may not do any of the
  158  following:
  159         (1)Assess, collect, or solicit an advance fee from a
  160  business to provide services as a broker. However, this
  161  subsection does not preclude a broker from soliciting a business
  162  to pay for, or preclude a business from paying for, actual
  163  services necessary to apply for a commercial financing
  164  transaction, including, but not limited to, a credit check or an
  165  appraisal of security, if such payment is made by check or money
  166  order payable to a party independent of the broker.
  167         (2)Make or use any false or misleading representation or
  168  omit any material fact in the offer or sale of the services of a
  169  broker or engage, directly or indirectly, in any act that
  170  operates or would operate as fraud or deception upon any person
  171  in connection with the offer or sale of the services of a
  172  broker, notwithstanding the absence of reliance by the business.
  173         (3)Make or use any false or deceptive representation in
  174  its business dealings.
  175         (4)Offer the services of a broker in any advertisement
  176  without disclosing the actual address and telephone number of
  177  the business of the broker and the address and telephone number
  178  of any forwarding service the broker may use, if any.
  179         559.9615Enforcement.—
  180         (1)The Attorney General has exclusive authority to enforce
  181  this part. The Attorney General may:
  182         (a)Receive and act on complaints.
  183         (b)Take action designed to obtain voluntary compliance
  184  with this part.
  185         (c)Commence administrative or judicial proceedings to
  186  enforce compliance with this part.
  187         (2)(a)A violation of this part is punishable by a fine of
  188  $500 per incident, not to exceed $20,000 for all aggregated
  189  violations arising from the use of the transaction documentation
  190  or materials found to be in violation of this part.
  191         (b)A violation of this part after receipt of a written
  192  notice of a prior violation from the Attorney General is
  193  punishable by a fine of $1,000 per incident, not to exceed
  194  $50,000 for all aggregated violations arising from the use of
  195  the transaction documentation or materials found to be in
  196  violation of this part.
  197         (c)A violation of this part does not affect the
  198  enforceability or validity of the underlying commercial
  199  financing transaction.
  200         (3)This part does not create a private right of action
  201  against any person or entity based upon compliance or
  202  noncompliance with this part.
  203         Section 2. This act shall take effect July 1, 2023.
  204  
  205  ================= T I T L E  A M E N D M E N T ================
  206  And the title is amended as follows:
  207         Delete everything before the enacting clause
  208  and insert:
  209                        A bill to be entitled                      
  210         An act relating to commercial financing transaction
  211         brokers and providers; creating part XIII of ch. 559,
  212         F.S., entitled “Florida Commercial Financing
  213         Disclosure Law”; creating s. 559.961, F.S.; providing
  214         a short title; creating s. 559.9611, F.S.; defining
  215         terms; creating s. 559.9612, F.S.; providing
  216         applicability; creating s. 559.9613, F.S.; requiring
  217         providers that consummate commercial financing
  218         transactions to provide specified written disclosures;
  219         creating s. 559.9614, F.S.; prohibiting brokers from
  220         taking specified actions; creating s. 559.9615, F.S.;
  221         providing exclusive authority of the Attorney General
  222         to enforce specified provisions; providing civil
  223         penalties; providing construction; providing an
  224         effective date.